Shell offers to pay pounds 10m extra tax for Bent Spar U-turn headline please

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The Independent Online
Shell yesterday offered to pay at least pounds 10m extra tax to the Government in the aftermath of the Brent Spar affair.

The offer came in a letter to Tim Eggar, the energy minister, while the Prime Minister was condemning Shell, Greenpeace and European governments for their role in following the oil company's decision to scrap plans to dump the 14,500-ton rig in the north-east Atlantic.

"I deeply regret Shell's decision to cave in to misguided pressure from environmental groups and some foreign governments," Mr Major told the House of Commons at Question Time.

"The deep-sea disposal plan complied with international laws and other North Sea states had been notified well in advance, but not one of these had objected until they succumbed to pressure from Greenpeace," said Mr Major.

"I shall make it clear to my colleagues across Europe that there will almost undoubtedly be a price to pay for their weakness in this particular respect."

Shell's offer to pay extra tax stems from the fact that oil companies can claim generous relief from Petroleum Revenue Tax - from 50 to 70 per cent - on the cost of decommissioning redundant North Sea structures. Shell has now decided to scrap the Brent Spar onshore, which is expected to cost the company about pounds 35m extra. Thus Shell and the joint owner of the Brent Spar, the US oil giant Esso, might have been entitled to claim extra relief of up to pounds 20m.

Dr Chris Fay, Shell UK chairman, said in yesterday's letter: "The company will make no request for tax allowances ... additional to those that would have been incurred under the deepwater disposal plan." But he added that he could not speak for Esso.

Mr Eggar has said that Shell was morally obliged to forgo any extra tax relief resulting from its U-turn.

The storage rig was last night being towed away from the 7,000ft-deep dump site. It is heading for Norway, the only country for thousands of miles with sheltered water deep enough for the Brent Spar.

Shell and the Norwegian government confirmed that the oil company would be seeking permission to anchor the buoy in a fjord while a method of scrapping it onshore was devised and submitted for approval by the UK government.

John Gummer, Secretary of State for the Environment, yesterday blocked a move by fellow environment ministers to ban any future sea dumping of redundant oil installations in the North Sea at a European Union meeting in Luxembourg.

Before the meeting, an angry Mr Gummer said: "German and Dutch rivers produce more lead pollution in 10 minutes than the Brent Spar would in its lifetime."

The Danish Environment Minister, Svend Auken, said: "You have to forgive the British, they're desperate."

Meanwhile, it emerged that Shell security staff and Grampian police had been within a few hours of storming the Brent Spar and evicting four Greenpeace activists on Tuesday afternoon, before the company's change of mind.

Two helicopters with staff and police on board were about to fly from Stornoway on Tuesday afternoon, when they were to told to delay their departure and then stand down.

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