The International Transport Workers Federation (ITF) has released a new report that pours scorn on “secretive” corporate structures used by North Sea oil and gas firms, and calls for the UK government to end the exploitation of tax loopholes.
The ITF’s Offshore Oil, Offshore Tax report, which can be accessed here, comes in the wake of the recent news that Nexen, which is controlled by China National Offshore Oil Corporation (CNOOC), is to benefit from a UK tax break of over £2bn.
The discount is a result of tax cuts introduced by the UK government in 2015, designed to ease pressure on North Sea oil producers while oil prices remain depressed. Nexen is responsible for around 10% of total output from the North Sea and runs two of the region’s biggest oilfields.
“The concerns emerging this week about the secretive corporate structure of Nexen are rife within the oil and gas sector. The public would be shocked to see how Chevron uses a complex web of companies to route money through the Netherlands, Bermuda and other tax havens. It has over 200 active subsidiaries in Bermuda alone,” said Steve Cotton, the ITF’s general secretary.
“It is well documented that both Shell and BP are using similar corporate structures to reduce their tax in the UK. Both BP and Shell in 2014 paid no UK corporate tax,” Cotton went on.
“I think the public will demand action from our political leaders to get to the bottom of what this report has found. The UK Parliament needs to establish an inquiry to investigate the corporate structures used by the oil companies operating in the North Sea and the impact they have on security, taxes and royalties.”
Pat Rafferty, the Scottish secretary of the Unite workers’ union, echoed Cotton’s words and called for policy change.
“The UK government needs to investigate and step up action to clamp down on any inappropriate tax loopholes being exploited by Chevron to make sure UK taxpayers aren’t taken for a ride and it pays its fair share,” Rafferty said.
UK shadow chancellor John McDonnell MP said the report showed it is “time to put a stop to these complex company structures that rip off taxpayers and place extra strains on public services across the globe”.