Gabon Considering Back Tax Penalties Against Royal Dutch Shell
Oil minister says audit could result in demand for about $100 million in back taxes from energy company
Fuel pumps display various Shell logos at a gas station in London in January. ENLARGE
Gabon’s oil minister said the country is considering levying tens of millions of dollars in tax penalties against giant energy company Royal Dutch Shell PLC, prompting the U.K. government to contact the African government, according to people familiar with the matter.
Gabon Oil Minister Etienne Ngoubou said the government was conducting an audit of the Anglo-Dutch company and considering demanding back taxes. He said the amount of back taxes the government would demand—if any—is likely under $100 million.
“But the audit is not finished,” he said in an interview.
The audit prompted the U.K.’s Foreign and Commonwealth office to contact the Gabon government in late March and urge it to provide a transparent and attractive environment for British businesses, the people familiar with the matter said.
Shell declined to comment.
Mr. Ngoubou said he wasn’t aware of any approach by the U.K. government to Gabon on behalf of Shell.
An FCO spokesman said the British government supports U.K. companies in Gabon and throughout the world. “We seek to encourage governments to improve the ease of doing business, to promote greater transparency and to boost the attractiveness of markets to investment by U.K. businesses,” he said, without commenting on the specific approach. Shell declined to comment.
Gabon, a West African country of 1.7 million people, produces 239,000 barrels of oil a day. Shell, there since 1960, operates onshore and offshore oil and gas assets from which it gets 12,000 barrels a day of oil.
If Gabon seeks back taxes from Shell, it would be the latest in a series of tax disputes with foreign oil companies. In February 2014, Gabon demanded tax arrears of $805 million from France’s Total SA, which it said was settled in November for an undisclosed amount.
In its approach to the Gabonese government, the U.K. also mentioned the African country’s dispute with U.K.-listed oil explorer Tullow Oil PLC.
Tullow is locked in protracted talks to recover a stake in oil fields that had been expropriated by Gabon. Tullow said in February it hoped to get the asset back by the end of June. Mr. Ngoubou said “discussions are continuing.”