According to the Carbon Majors’ Database, BP and Shell rank as the sixth and seventh largest carbon emitters globally since the industrial revolution. Together, they account for 4.3% of all carbon emissions worldwide since 1854, and over 2% since 2016. In contrast, the UK’s domestic emissions represent about 1% of global carbon pollution. By hosting these companies, Britain plays a significant role in destabilizing the climatic systems that our civilization relies on. By providing a base for these entities, Britain essentially supports the global addiction to fossil fuels.
In exploring the relationship between Big Oil and the British state, I’ve previously examined how Britain’s trade policies safeguard oil industry assets globally, embedding significant climate-changing emissions, and how its military strategy serves as a substantial subsidy to the oil trade. Upon interviewing experts in the Netherlands and the UK regarding Shell’s decision to relocate, two main reasons emerged: the tax system and a legal case by Friends of the Earth Netherlands addressing the company’s climate shortcomings. This essay delves into tax issues, specifically how Britain’s role as a tax haven contributes to the climate crisis. The subsequent essay will explore why the English legal system was appealing to one of the world’s largest polluters evading justice.
Alison Schultz from the Tax Justice Network remarked, “It just makes perfect sense as a company. If you really want to dodge taxes, it makes sense to locate to the UK. Even coming from the Netherlands – which [also] allows you to pay little tax and to hide things.” She explained that the primary motivation for Shell’s relocation was to avoid dividend withholding tax. While the Netherlands imposes a 15% rate and Germany 26%, the UK does not levy this tax. Relocating allowed Shell to avoid these taxes.
Tax-abuse
Vincent Kiezebrink, a researcher at the Dutch think tank SOMO, also emphasized the importance of dividend withholding tax. Shell had remained in the Netherlands while the government considered abolishing this tax. However, following opposition backlash, the plan was abandoned, prompting Shell’s move to the UK. Unilever had similarly moved its headquarters to the UK in 2020. Ben van Beurden, Shell’s CEO at the time, noted in a 2025 podcast that this tax consideration was a significant factor in the decision to relocate.
If Shell had remained in the Netherlands, the financial benefits from any increase in oil prices would have contributed to public services there. Now, based in Britain, these dividends go directly to shareholders.
Additionally, Shell receives dividends from its global subsidiaries. Schultz noted that while many countries exempt such earnings from tax under certain conditions, Britain’s rules are especially favorable for large conglomerates like Shell.
Britain’s tax regime for North Sea oil extraction is complex and tends to favor oil company profits. A 2020 report revealed that in 2016, despite producing only 2% of the UK’s oil, the north German region of Schleswig-Holstein received $57 million from companies, while the UK paid $322 million to them. This report estimated that the UK missed out on £250 billion ($323 billion) in tax revenue over 13 years due to its generous policies. Although headline tax rates have risen since the 2022 price spikes following Russia’s invasion of Ukraine, the underlying framework remains more industry-friendly than those of other countries.
Schultz and her team have analyzed various tax systems across 70 countries, ranking them by their facilitation of corporate tax abuse. Britain ranks 19th, with Shell and BP being major beneficiaries. Schultz states, “The UK is a major tax haven,” a fact well-known among international experts but seldom discussed in British media.
Conglomerate
However, this assessment underplays Britain’s role in global tax evasion. The British Virgin Islands and the Cayman Islands rank as the top two facilitators, with Bermuda, Jersey, the Isle of Man, and Guernsey also prominent. These are British Overseas Territories or Crown Dependencies, making seven of the top 20 British jurisdictions. Other regions like Singapore, Hong Kong, the UAE, the Bahamas, Cyprus, and Malta also have historical ties to the UK. Some British Overseas Territories, such as Anguilla, Turks and Caicos, and Gibraltar, rank lower due to their smaller global roles, yet they remain part of Britain’s offshore network.
This network represents the most significant offshore system worldwide.
Usually, British citizens pay little attention to these territories. When criticized, they are often seen as independent entities over which Britain has limited control. Yet, the establishment of these offshore havens was orchestrated by Whitehall, London banks, and consultancy firms, with the Bank of England’s tacit approval.
This began in Jersey in the 1960s. Marcus Samuel of HM Samuel and Co, faced with clients wanting to avoid high British taxes amidst decolonization, persuaded Jersey’s parliament to lift interest rate caps, creating an offshore haven. Samuel, a House of Lords member, was the third Viscount Bearsten. His grandfather, the first Viscount, founded Shell. This historical link underscores the enduring connection between Britain’s oil industry and its tax havens.
Shell uses the Shell Overseas Contributory Pension Fund to provide pensions for employees working abroad. This fund, valued at approximately $5 billion, is registered in Bermuda. Shell’s latest annual report lists eight Bermuda-based companies, including Qatar Shell GTL Ltd and Shell Oman Trading Ltd, with about £1.8 billion ($2.33 billion) in capital there. Despite limited operations in Bermuda, Shell employs only three people there. Similarly, Shell has seven companies in the Cayman Islands, suggesting activities in regions like Egypt, India, and Bolivia.
Complexities
The Bahamas, however, plays a more significant role in Shell’s operations. Shell’s 2024 tax report shows $33 billion in revenue from this small Caribbean nation, accounting for 11% of its global revenue, despite employing just 45 people there. Although independent since 1973, the Bahamas became a tax haven under British colonial rule and remains part of the British offshore network. It maintains constitutional links to the UK, with legal appeals directed to the judicial committee of the Privy Council.
Gibraltar, another British Overseas Territory, leverages its UK connections to attract businesses. Its business minister highlighted that the highest court of appeal is the judicial committee of the Privy Council, providing reassurance to investors that disputes will be resolved in London. This court protection is likely a factor in Shell’s significant presence in the Bahamas. In a subsequent essay, I will explore how Britain’s legal system supports the oil industry.
While the Bahamas is central to Shell’s tax strategy, Guernsey in the Channel Islands is crucial for BP. In 2020, Reuters reported that BP’s captive insurer, Jupiter Insurance Ltd, held $6.5 billion in cash at the end of 2018, accounting for up to 14% of BP’s annual profits. Despite having six directors, Jupiter has no employees, with insurance administration outsourced to a Guernsey-based brokerage. BP’s most recent tax report states that its Guernsey insurer’s profits are subject to UK taxes, though BP did not clarify this when questioned.
BP also has three subsidiaries in the British Virgin Islands and partial stakes in nine Cayman Islands companies.
While London offers easy access to legal and accounting expertise in utilizing Britain’s offshore options, foreign oil companies also leverage these jurisdictions to protect profits. For example, Saudi Aramco, the world’s largest oil company, has used the Cayman Islands extensively to raise capital, while Chevron, an American oil giant, has a Bermuda address for multiple subsidiaries.
Jurisdictions
Among the world’s top ten offshore oil rig contractors, three are based in Bermuda. Valaris, the largest with the most oil rigs, is located near Chevron House. Seadrill and Borr Drilling have nearby offices. Similarly, four of the top ten oil tanker companies are registered in Bermuda. DHT Holdings, the sixth largest, is headquartered at Clarendon House, as is Valaris. Other major firms, like SFL and Frontline, are located within walking distance, while Teekay Corp is also nearby. Stellar, a Saudi Aramco-owned insurance company, and Everen Ltd, an oil industry insurance specialist, are also based in Hamilton.
In a short walk through Hamilton, one can see the headquarters of leading oil drilling and tanker companies, major hubs for Chevron and Shell, and the insurance provider for the world’s largest oil company. With a population of about a thousand, Hamilton, similar in size to a large UK village, plays a crucial role in global warming.
Many British jurisdictions, including the UK and its Overseas Territories and Crown Dependencies, allow ships to register there as their home port. Collectively, they form the Red Ensign Group, boasting the world’s ninth-largest shipping fleet. The Isle of Man is particularly noteworthy, with over 16 million gross tons of shipping on its register, over half of which are tankers. The Isle of Man ranks 18th globally in trading fleet size, surpassing the USA and Russia, with the UK 24th and Bermuda 35th.
Profits
Beyond oil companies, other industries also benefit from low-tax areas. The coal mining giant Glencore is headquartered in a low-tax Swiss canton. The Tax Justice Network notes that Glencore plc is registered in Jersey. Investigations have shown that Adani, a major coal mining company, extensively uses the British Virgin Islands. Australian mining conglomerate BHP has companies in several British offshore territories, including the Cayman Islands, Bermuda, Guernsey, Jersey, and the UK.
A BHP spokesperson stated that their “tax, royalty and other payments to governments” in 2025 totaled $10.4 billion, with 65% paid in Australia. “Our global adjusted effective tax rate in FY2025 was 37.2%. Once royalties are included, our FY2025 rate increases to 44.6%,” they added, highlighting a “long-standing commitment to transparency.”
While minimizing tax obligations is likely a primary motivation for these companies, offshore jurisdictions also offer benefits like lax regulation and secrecy. Schultz and a colleague noted in a recent report that the lack of transparency allows banks claiming not to fund fossil fuel projects to funnel money into projects in these areas, obscuring their actual investments. This practice is known as “greenlaundering.” There is no suggestion that any companies mentioned have broken laws. Except for Glencore and BHP, none provided comments for this article.
British offshore jurisdictions play a vital role in maximizing profits for fossil fuel companies, enabling their continued existence as they push the planet toward a climate crisis. Understanding Britain’s responsibility for the climate crisis requires examining its status as a tax haven and its creation and maintenance of a crucial offshore network, which is more revealing than merely counting domestic emissions.
Influence
The UK’s tax agency, HMRC, is notably secretive. Other government departments complied when I requested lists of companies with whom they had secondments, but HMRC refused. This led me to appeal to the Information Commissioner, a case still ongoing. I know Shell previously had secondment arrangements with HMRC.
HMRC allows big businesses to negotiate their tax liabilities, with these negotiations and agreements remaining secret. Schultz noted that this is unusual compared to other countries’ tax authorities.
Oil companies enjoy more access to Treasury ministers than most other sectors. Between September 2024 and September 2025, Treasury ministers met with Shell or BP 18 times and held multiple meetings with smaller oil companies. While the UK’s oil dependency necessitates regular meetings with the industry, this frequent access is notable. These companies openly plan to release significant carbon emissions, yet they receive special governmental access.
The financial and professional services sectors exert considerable influence on the Treasury and HMRC. These sectors are heavily invested in fossil fuels. For example, Jen Tippin, NatWest’s chief operating officer, also serves on HMRC’s board. NatWest continues to invest in fossil fuels despite pledges for net-zero commitments. Tippin is also a former head of tax policy at Deloitte, a firm with longstanding oil and gas clients.
Societies worldwide must transition away from oil. However, fossil fuel interests have exploited Britain’s constitutional loopholes to embed themselves deeply in the global economy, evading transparency and taxes, perpetuating their influence. The closer you examine, the more evident it becomes that these loopholes are part of the system. Recent oil industry profiteering will push millions into poverty globally while enriching the extremely wealthy, aided by Britain and its offshore networks.
This Author
Adam Ramsay is an investigative journalist and publishes the Abolish Westminster newsletter. Explore more from this special series, Big Oil and the British State.
