Oil major Shell said it would take a hit amounting to some $2 billion (£1.7bn) in relation to UK and EU windfall taxes for its latest quarter as it delivered mixed news for investors.

The revelation comes after bosses at the group said in October they had not paid any UK windfall taxes due to heavy investment in the North Sea, where Shell remains a key player despite the area’s maturity. In an update, the firm told investors that it will face a hit to earnings for the final quarter of 2022 due to the increased UK energy profits levy and additional EU taxes.

In May, the UK government announced the windfall tax on the profit of oil and gas companies, with the new Chancellor announcing in November that this would be increased from an original 25 per cent to 35 per cent.

Shell flags $2 billion hit from UK and European windfall taxes in last quarter