A US lawmaker has accused Shell of grounding a major oil rig one day before it would have been liable to pay millions of dollars in taxes had it stayed in its original position off the Alaskan coast.

In a letter from US representative Ed Markey to Shell’s top US chief, Marvin Odum, Mr Markey says the decision to ground the rig whilst it was being towed south for the Winter on New Year's Eve, "may have been driven, in part, by a desire to avoid...tax liability on the rig."

On 31 December, Shell claimed that "near hurricane" conditions were to blame for the migration of its major drillship. However, if the rig stayed off the coast of Alaska until 1 January, Shell may have been exposed to a state 2 per cent tax rate on all drilling equipment. Markey reckons that Shell would have had to pay around $6m, and that the company’s claim that bad weather prompted the move was inconsistent with reports from the National Weather Service. 

Shell has responded by saying the decision to move the rig was driven by safety, not taxes.

Markey is an outspoken critic of the oil industry and has challenged Shell in the past on the contingency plans for any accidents during their off-shore operations. Shell has spent around $292m to upgrade the rig and $4.5bn to develop the Arctic's vast oil reserves since 2005.

 

Written and presented by Alfred Joyner