PROFIT BEFORE TAX
Main Business Activities
- Upstream and Integrated Gas
- Trading and Supply
- Other support activities
Shell has been present in Malaysia since 1891 and has a strong market presence in the upstream and downstream sectors. Shell has a number of production sharing contracts (PSC) for oil and gas production. Shell has deep-water platforms in Sabah and around 950 retail sites throughout the country. Shell MDS (Malaysia) Sdn. Bhd. (Shell MDS) converts natural gas into ultra-pure gas-to-liquids products. Shell MDS produces a wide range of high-quality waxes, specialty chemicals and transport fuels, which are marketed to more than 50 countries.
The SK8 PSC operated by Shell expired and was relinquished to Petronas in June 2019. In December 2019, Shell signed an agreement for the extension of the MLNG PSC with Petronas until December 2025. Under the agreement, Shell will become the operator for new exploration acreage and fields.
Country Financial Analysis
Shell pays corporate income tax at the rate of 24% for downstream entities and petroleum income tax of 38% for upstream entities.
Some PSCs benefit from the Investment Tax Allowance (ITA) incentive for qualifying capital expenditure incurred. In addition, the Marginal Field Tax Incentive (MFTI) provides accelerated capital allowances for expenditure incurred from 2010 to 2024 and reduces the effective tax rate from 38% to 25% for qualifying fields. In 2019, production was reduced as a result of a rupture in the Sabah-Sarawak Gas Pipeline (SSGP). This reduced profits and tax for the impacted PSC.