Oil and gas major Shell said Friday it expects to pay an extra $2 billion in new taxes for the fourth quarter in the European Union and U.K.

“The Q4’22 earnings impact of recently announced additional taxes in the EU (the solidarity contribution)
and the deferred tax impact from the increased UK Energy Profits Levy is expected to be around $2 billion,” the company said in a trading update.

The EU agreed in September that oil and gas companies will pay a levy on the surplus profits made in 2022 or 2023. The “solidarity contribution” will see firms pay 33% of profits above their average taxable profits.

Meanwhile, U.K. Finance Minister Jeremy Hunt said in his November Autumn Statement that the energy industry will be subject to an expanded windfall tax of 35%.

Energy companies’ revenues have soared following Western sanctions blocking access to Russian supplies.

Shell, which will release its full fourth-quarter results on Feb. 2, also said it expects between $550 million and $750 million of losses in adjusted earnings over the period. The EU and U.K. levies will not affect the adjusted earnings figures, the company said.

This is a developing news story and will be updated shortly.