• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 12 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 11 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 12 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 12 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 11 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 10 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 14 hours Saudi A to Splash $100 Bln on India
  • 1 day Itt looks like natural gas may be at its lowest price ever.
  • 13 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 7 hours Washington Eyes Crackdown On OPEC
  • 1 day Amazon’s Exit Could Scare Off Tech Companies From New York
  • 22 hours NEW FERUKA REFINERY
  • 9 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
EIA Inventory Report Pushes Oil Prices Lower

EIA Inventory Report Pushes Oil Prices Lower

Oil prices fell somewhat on…

The World’s Largest Battery To Power The Permian

The World’s Largest Battery To Power The Permian

A huge 495-MW energy storage…

Shell Expects To Book A $2.5 Billion Charge Due To U.S. Tax Reform

Shell

Shell said it will book a US$2-2.5-billion charge in its fourth-quarter 2017 results following the tax reform bill passed by Congress last week. The charge is a result of a re-measurement of the company’s deferred tax position. Overall, however, the effect of the reform would be favorable. The supermajor added the analysis of the reform’s impact on its business was still ongoing.

The charge, Shell went on to say, would take the shape of a non-cash adjustment and will be entered as an identified item in the fourth-quarter report. Its size is only an estimate based on the company’s third-quarter financial figures, so the actual charge may be larger or smaller.

The Republican tax reform, which President Trump signed into law last Friday, envisages a reduction to the corporate tax rate from 35 percent to 21 percent and sets limits on the corporate interest payment deductibility, among other provisions widely seen as benefitting the oil and gas industry at the expense of renewable energy.

Yet, these benefits might turn out to be more theoretical than practical. Before the tax bill was passed, oil tycoon Harold Hamm said that even with the corporate taxes cut, U.S. drillers would not return to the lavish spending days from before the downturn, because companies are now much more disciplined in their finances and looking to boost profits.

“That’s not the deal anymore, and finally the analysts and everybody else caught on. Shareholders caught on and said, ‘We’re not going to put money in there just for growth’s sake. We want a return, a good return on capital employed,” Continental Resources’ chairman and chief executive Hamm told CNBC in early December.

However, the lower corporate tax rate would certainly help oil and gas drillers return cash to shareholders, which is emerging as the new top priority after the austerity period. Shell was among the first that signaled the end of that period when last month it said it would return to an all-cash dividend and begin buying back shares, sold during the downturn to keep the company going.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News