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BBC are reporting that Johnson will fill role as Caretaker PM until the Autumn and govern under the conventions of that role.
That basically means no controversial policy decisions ruling out any U turn on the windfall tax - investors will have to hope that by tweaking the detail concessions can be gained.
I doubt that WT will be scrapped - it just won't happen. However, there is a bit of good news in the changes secured by OEUK. Decomm spend can be used to reduce taxable profit - nice. Will save us a bit of tax. Hopefully, Zahawi can make a few more tweaks and give us some more concessions. The tide should turn for us and HBR (they're even more reliant on decomm spend to cut tax spend than us) soon, IMO.
"The government changed the draft bill to set a firm end date for the levy in December 2025 and allow firms to reduce the tax by spending on decommissioning old fields and investing in the electrification of producing fields."
Slightest sniff of the WT being scrapped will send this straight back into the 30's
Remove the green Tax, Scrap the WT and limit the Tax at the pump
37p when Rishi floated the WT. Another 2m barrels flowed since then.
yeh right
Great links Lytham, wow it’s onwards and upwards then.
We should never have been part of this windfall tax in the first place.
Expecting the sp to move up considerably and recover the lost ground.
All good then:
https://www.newstatesman.com/environment/2022/07/new-uk-chancellor-nadhim-zahawiwhy-putting-oil-exec-economy-bad-idea
How Zahawi plays this is key at the moment.
'OEUK also wants Zahawi to exempt smaller producers from the levy'
https://www.oedigital.com/news/497931-uk-oil-sector-secures-changes-to-windfall-tax-want-more-amid-gov-t-chaos
Busy few hours but sure it's all in a day's work for the canny dealmaker. Hopefully AB has been in touch to wish him well.
https://www.theguardian.com/uk-news/2022/jul/06/nadhim-zahawi-the-past-business-dealings-of-the-new-chancellor
Removing the WT will be political suicide but changing the rules to who it applies to is a real possibility. I bet AB can approach him far easier than RS and he will understand the need smaller companies with higher debt ratios to be given some slack
There's Always a twist within the oil sector and this months twist was negative, Next month could see the complete opposite
When will the WFT be finally decided? Or has it passed allready?
Chilting - I disagree. The Tories are fed up of populist policies. They know they will get crucified by traditional tories if they can’t be taken seriously on economic policy. You see in the resignation letters how these guys will position themselves for leadership contest.
Boris is weak now so we may see policy decisions to keep the low tax wing of the party happy. I see Zahwi having some room to make his on way. Mitigations at the very least IMHO.
https://www.theguardian.com/politics/2022/jul/06/new-uk-chancellor-nadhim-zahawi-to-review-corporation-tax-rises
'Zahawi, a former oil industry adviser, is known to be a supporter of lower taxes and most recently opposed a windfall tax on oil and gas companies operating in the north sea. He told Sky his priority was to “rebuild and grow the economy”.'
Maybe there is a chance that is at least revised and allow to use tax losses. One can always hope..
I don't see any UK politicians from any party backing down on the windfall tax.
It was the wrong decision to make but it was very clearly backed by the majority of voters.
A clear case of a very unpopular Prime Minister trying to save his post by promoting populist policies.
Now the decision has been made it would be political suicide for a new Prime Minister to U turn on the issue.
Market knows more than the average PI....
16p was my target but looks like it can go lower!!
This is going to get ugly...14p before Nov
"But what will happen to oil share prices in the US if Bidden introduces a windfall tax?
Although it maybe that US oil companies are confident that a windfall tax would be blocked unlike in the UK and EU where oil companies are fair game, even the majors."
I'll give you the % probability of a Windfall tax being imposed in the US - a big fat ZERO. Even if you assume that a democratic controlled senatetries to use the reconciliation approach to try to impose a WT, Senator Manchin, the Dem from WV, will NEVER support such a measure (Remember he was the one to torpedo the Build Back Better act) as he's from a coal producing state and is massively pro O&G too. If you really know the US political setup, you'd know that there won't a O&G winfall tax now, and certainly not when republicans take over the house in November.
Given that agri and base commodity prices have tanked just in the last 5 to 6 weeks since the fed embarked on the rate hikes - Wheat, Corn, Palm oil - are all down 40 to 45% from recent highs and base commodities like Copper are down 30% and oil hasn't spared either, it stands to reason that the fed will pull back from aggressive rate hikes after the July hike and that sets the oil and stock markets up quite nicely going into the end of the year. People's pockets will be pinched less from herein onwards and then the ongoing supply issues for oil will come to fore and keep prices buoyant. That's my base case.
True, if we were to have a full-blown recession in the US, then I see oil tanking to the 60s/70s that the perma bears, Citi, has been calling. I'm personally not seeing that and that's great for FCF. Wouldn't it be nice if the WT were to be diluted - now that the numpty that came up with this proposal is out, maybe that could happen?
Auson
But what will happen to oil share prices in the US if Bidden introduces a windfall tax?
Although it maybe that US oil companies are confident that a windfall tax would be blocked unlike in the UK and EU where oil companies are fair game, even the majors.
Chilting,
There is no way OXY would be rock bottom if it wasn't for Buffet. They are making more money than God.
Devon Energy up 92.04% YTD
Exxon up 38.19% YTD
Marathon Petroleum up 38.61% YTD
Pioneer Natural Resources up 41.98% YTD
Hi!
Sorry for writing free-handed but I just have to training on that.
My files are updated again with WT, prices and production.
Some other files are also updated.
WT will be a maximum of 25% minus certain items of investment and it still makes sense to invest in NS thanks to the tax deductions.
That would be enough for chilt, I'll think.
This is probably a good opportunity to buy things from companies that do not have deductions.
Prices is updated about VLSFO as it looked stupid to have them soo low as I have.
Production have a bigger difference at Magnus as I have calculated to low and now with new OGA data I put it in right direction.
In "calculate" is the flights updated and even with a fall in April is it only 15% after record year (-19) and 9% after -18 at moment in commercial flights.
For total flights is it at all time high.
Enquest will drill an exploration well by the end of the PM409 exploration period, which ends in December 2023.
That results will be interesting!
This is going to fly but the timing is harder but I still thought that we will reach 45p this year.
Good luck everyone.
Regards/Kamrat
Auson
Yes, its difficult to understand - maybe is just the bear market - lots of other share valuations in all sectors are difficult to understand at the moment.
I think a lot of investors are just sitting on the sidelines at the moment that depresses prices.
OXY is the exception because Buffet is buying, if he wasn't, that would probably be rock bottom as well.
The point is that investors look for safe options at times like this, unless the rough it out, so AZN for example is at a year high.
US oil companies won’t put up with that, they will down tools pushing oil prices into orbit
I have just topped up to . Just wish it was this time next year as when we start buy backs / dividends etc the market won’t be able to keep this down or worst case we get our money back and more from being patient . Very different time to previous recessions! Let’s see!
chilting,
I am sure that risk could be worth one or two percentage points but Tullow is only 2p off the yearly low !
Biden is mulling a windfall tax also and OXY is up over 93 % only $10 off the yearly high and $37 above the yearly low !
Brent Crude YTD up 33.99%
Tullow Oil down 29.67% YTD
Enquest down 0.92% YTD
Harbour down 20.67% YTD
BP up 14.9% YTD
Shell up 35% YTD
Occidental Petroleum up 93.74% YTD
Auson
I think the expectation is that other counties will follow the UK lead and introduce their own windfall taxes so maybe that is affecting Tullow's SP.