Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
I'm inclined to believe Hunt is headstrong, and doesn't like to be seen changing his position (even if the facts supporting that position change).
The tax grab is disproportionate - even 65% is excessive - but he thinks he can get away with this since the O&G sector is perceived to be fading (cretinous thinking); and so many Olivers, Tristans and Jacintas have been gluing themselves to the roads in anger at society's use of any oil (not realising both the glue and the road also relied on oil for manufacture)
Linus's response is excellent; politely saying the firm is no longer interested in additional NS investment. I hope other CEOs follow suit, and let the licensing round lapse. In addition I would also like to see, throughout this Winter and next Spring, continuous and rolling load shedding across the UK, including blackouts across the coldest days and nights. The public understanding of society's reliance upon O&G derived products needs a jolt (excuse the pun).
Agreed. The BoD is in a good position with a growing cash pile, but this needs to be deployed at the best target...we can only spend it once. The NS with 75% tax has effectively been nationalised (for free); a government which acts cynically and without transparency is likely to repeat such actions if it can get away once, and it's not as if this grab has addressed the significant holes across UK plc's balance sheet after years of economic tailspin and mismanagement.
@Surprised - I hope you're right in relation to the penny dropping anytime soon with the govt
But this govt has proven to be erratic and haphazard, doing about as much as it can to kill investment; presumably 100% tax was considered unpalatable, but who knows what tomorrow will bring.
Hand in hand with this muddle-headed grab, the govt decided to purchase LNG from the US at multiples of NS natural gas price. Essentially a transfer of wealth from the UK to the US. It's not clear how making local O&G exploration unviable whilst paying elevated prices for imports from half way around the world makes either economic or environmental sense for the country. Aren't the tories always patting themselves on the back for their economic prowess?
Why such a swingeing tax? - because they could, and somebody has to pay for years of govt ineptitude and largesse; O&G happens to be an easy target for so many misplaced reasons (and some legitimate I would add).
The US LNG deal acts as a counter weight in anticipation of reduced or tapering NS extraction; the govt don't personally pay the elevated prices so they don't really care. Cynically, govt acts of sabotage ahead of a 2024 election are useful as it will leave an incoming govt with an even more fragile economy. That would be consistent with prioritising electoral success over national economic strength.
I don't see any other rational explanations
Desperate measures from a desperate UK govt reminiscent of a crack-head stealing the family TV for one more day of highs...there is no positive prognosis in any of this in relation to govt economic policy and planning.
One mechanism for the BoD to provide some return to investors in the short term, and partially mitigate against this latest govt whimsy is to strengthen credit lines, collateralised against hedges or production, for a sizeable extraordinary dividend and buy-back before year end, prior to the new rates taking effect.
Zero cost, in fact negative cost. The govt will be paid handsomely at 75% on all profits.
I hope Conservative voters think hard about the integrity and trustworthiness of this opportunistic govt that will say and do most anything to hang on to power, only to about turn at any random moment afterwards. I don't think Labour ever advocated a 35% windfall tax. And had Labour been in govt it is unlikely that a second WFT would have been implemented right after the first, for fear of the reputational damage. Yet here we are with this incompetent govt. driving the economy into the ground.
Hunt is still waxing lyrical about the difficult decisions the party has taken, and the discipline the govt has shown.
Yet 75% overall tax mainly impacting smaller O&G producers is essentially a nationalised business paid for by private investors, and will choke future investment.
But the truth is, he doesn't really care. It's not about balancing taxes with spending, or taking a strategic view on how to meet the country's future energy needs. Nah, that's all quite complex. It's about taking focus group inputs and calculating how to potentially stay in power at the next election, or even just until tomorrow if that's all that's on offer.
Conservatives?!
If the Tories are left in charge for too much longer, the logical conclusion is a Bantustan...a corrupt, hollowed-out chimera of a democracy, where the wealthiest interests will set the agenda and direction of travel. Coming back from that is near impossible. Almost any other shade of honest democratic government is a better choice if democracy is more than just about P&L for a few.
A global realignment is in progress, with some complex choices ahead - we should all hope for a very steady hand at the tiller right now, given the cross currents.
How could anybody be worse?
The Tory government has had ZERO time for affairs of state.
Instead, occupied by FAR more important issues: how to get booze into No.10 for a shindig to celebrate God-knows-what whilst people's parents died alone in carehomes during a pandemic; continuous infighting and jostling for positioning on how many leadership changes since 2016? Compromising financial arrangements with Russian oligarchs (KGB/GRU representative sitting in the House of Lords FFS!), Saudi butchers, Chinese influence peddlars and Israeli intelligence....yeah, this government is really working in your interests, even whilst syphoning off Billions in funds to friends and family via VIP lanes during a pandemic, in the full knowledge that their friends and family had no expertise in the requirements.
And all the while, UK plc has been in the middle of death throes for over a decade.
A government of cynical liars and manipulators, but inept to the core to the core and intellectually sub-par so every devious scheme unravels in public view; they've turned the country into a bunch of Ratners - cheap, gaudy and 'crap'
Who could possibly do worse?