A coalition of environmental and tax justice groups is urging Chancellor Rachel Reeves to investigate the legality of a major North Sea oil and gas joint venture between Shell and Norway’s state-owned Equinor, raising concerns that the deal could allow Shell to avoid up to £1.3 billion in UK tax liabilities.
The joint venture, named Adura, would merge the two energy giants’ UK offshore oil and gas assets to create the North Sea’s largest independent producer when it becomes operational by the end of 2025. Based in Aberdeen and employing approximately 1,300 people, the venture would be owned equally by Shell and Equinor, producing over 140,000 barrels of oil equivalent per day in 2025.
Five campaign organisations – Stop Rosebank, Global Witness, Tax Justice UK, TaxWatch, and the End Fuel Poverty Coalition – have jointly written to the Chancellor alleging that the deal structure “raises serious questions around the firms’ real motivations”. According to their analysis, the arrangement would enable Shell to write off significant tax liabilities against losses and allowances accumulated by Equinor, which is carrying approximately £6 billion in deferred tax losses in the North Sea.
Reuters reported that Equinor brings around £6 billion of deferred tax losses to the joint venture, which can be offset against future spending. Industry analysts note that Equinor’s tax savings contribute to Adura’s financial flexibility, while Shell’s larger production capacity enhances cash flow for developing new fields.
Lauren MacDonald, lead campaigner at Stop Rosebank, argued that the deal “shows how our biggest polluters game the system to make it work for them”. She added: “As Equinor struggles to get its Rosebank project off the ground, this deal gives both companies what they want – a smaller tax bill for Shell and more profits for Equinor. Ahead of the autumn Budget, the Treasury must see this merger for what it is: a shameless attempt by two immensely wealthy mega-polluters to avoid paying their fair share into the UK economy”.
Shell Rejects Claims
Shell strongly rejected what it characterised as “flawed analysis” from campaigners. A company spokesperson stated: “Shell paid 1.45 billion dollars in corporate income taxes in the UK in 2023”. The spokesperson added that in the North Sea, a substantial portion of Shell’s UK operations faces a tax rate of 78%, and the company has invested billions over the past decade to extract oil and gas for British homes and businesses. Shell emphasised that Adura is being created to support production and is “anticipated to be a significant tax contributor to the UK Government throughout its duration”.
Rosebank Controversy
The joint venture includes Equinor’s 80% stake in the controversial Rosebank oil field, located west of Shetland and containing up to 300 million barrels of oil, making it the UK’s largest untapped oil field. Shell, having previously withdrawn from the similarly contentious Cambo oil project, will now gain exposure to Rosebank through the Adura venture.
Rosebank’s development has faced significant legal challenges. In January 2025, Scotland’s Court of Session ruled that the 2023 approval of the field was unlawful because it failed to account for downstream combustion emissions—the CO2 produced when the extracted oil and gas is burned. This followed a landmark UK Supreme Court ruling in June 2024 in Finch v. Surrey County Council, which established that environmental impact assessments must consider not only extraction emissions but also the climate impact of burning fossil fuels.
Equinor subsequently submitted a new environmental assessment estimating that Rosebank would generate nearly 250 million tonnes of CO2 over 25 years – more than 50 times higher than the previous projection of 4.5 million tonnes for extraction alone.
Strategic Rationale
Wood Mackenzie analysis indicates that Adura will produce nearly 150,000 barrels of oil equivalent per day in 2025, significantly ahead of Harbour Energy at 130,000 barrels per day, and is projected to reach 220,000 barrels per day by 2030, eclipsing second-largest producer Ithaca Energy by over 100,000 barrels per day.
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The venture will include Equinor’s equity interests in the Mariner, Rosebank, and Buzzard fields, and Shell’s equity interests in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion fields, along with various exploration licenses. Shell will retain ownership of its interests in the Fife NGL plant, St Fergus Gas Terminal, and floating wind projects MarramWind and CampionWind, and will remain technical developer of Acorn, Scotland’s largest carbon capture and storage project.
Completion of the transaction remains subject to regulatory approvals and is expected by the end of 2025.
