RE: Labour government means for oil and gas industry31 May 2024 17:14
Thanks meoryou
Absolutely right you never know. Murray did give his opinion at Q1 results. BP is not looking to re-list primarily in the US following Sawan's announcement at Shell to consider relisting if the value gap is not closing by year end '25. Total TTE are going through a consultation process on the same, to report back to their shareholders in September.
My opinion, for what it is worth, is while It is true that the valuation gap between European and US peers clearly exists. I don't believe a simple primary re-listing will make much difference to this gap as both BP and Shell are already available to US investors now with ADR shares.
So apart from increased market liquidity from the broken ftse, what would attract US funds to rush to invest in either BP, Shell or Total when you currently do not. ?
The valuation gap, in my opinion, has a lot more to do with the mind set of US energy investors. They see US peers prioritising oil and gas - with some investment into alternatives - and European companies being a mishmash of investments into unproven high cost, gambles. While this may be unfair and prove to be good investments, the higher investment in renewables and "green energy" projects complicates the understanding of European O&G companies.
The fact that the managements intend on attempting to close the valuation gap a priority is good to hear. What may change this is if Labour removes the tax incentive benefits of rebates for investment under their EPL and by becoming domiciled in the US opens up US tax advantages then as you say. Never say never.
Chat next week post Opec. Hope you have a great weekend.
Mark