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Not Harbour specific but relevant. An excellent interview between Serica CFO Martin Copeland and Simon French, Panmure Liberum's Chief Economist and Head of Research, “to discuss the UK government's evolving policy stance towards the North Sea, how it is impacting the outlook for the oil and gas industry, and the wider implications for UK net zero objectives.”’ https://fast.wistia.net/embed/iframe/r3sqho1omp?web_component=true&seo=true

MC is very impressive. His arguments for the UK government to change policy sooner rather than later are overwhelming. He covers very all the important issues, but the standout point for me is from 22:15 starting about the carbon footprint difference between imported LNG and UK gas, especially new gas, and then segueing from around 25;00 into the absolute key point about the way now carbon is accounted for. The carbon created from domestic production of goods and materials is on the UK’s budget, but domestic consumption is not. So, imported goods and materials, oil steel etc, are not added to the UK’s carbon budget. This perverse accounting methodology deliberately incentivises and favours imports of goods and materials over domestic and it is this, in good part, what is driving the UK’s deindustrialisation, including recent company closures. A policy shift is needed (are you listening, Sir Keir. Rachel, Ed?). (He also covers why the EU excludes hydrocarbons from their CBAM regulations as the EU produces very little oil and gas and if they included hydrocarbons in CBAM effectively they would be unable to,,, import any.)

He is even more than impressive on a second listen. His arguments for the UK government to change policy sooner rather than later are overwhelming. He covers very all the important issues, but the standout point for me is from 22:15 starting about the carbon footprint difference between imported LNG and UK gas, especially new gas, and then segueing from around 25;00 into the absolute key point about the way now carbon is accounted for. The carbon created from domestic production of goods and materials is on the UK’s budget, but domestic consumption is not. So, imported goods and materials, oil steel etc, are not added to the UK’s carbon budget. This perverse accounting methodology deliberately incentivises and favours imports of goods and materials over domestic and it is this, in good part, what is driving the UK’s deindustrialisation, including recent company closures. A policy shift is needed (are you listening, Sir Keir. Rachel, Ed?). (He also covers why the EU excludes hydrocarbons from their CBAM regulations as the EU produces very little oil and gas and if they included hydrocarbons in CBAM effectively they would be unable to,,, import any.)

The merger with Serica, apart the accelerated use of tax losses, economies of scale/synergies, wider choice of assets to exploit and/or acquire in the UK, would have given better options for overseas expansion. See from 30:10 in the interview. EnQuest is already operating outside the UK whilst Serica’s complete UK concentration is an issue. A merged company could use EnQuest’s existing overseas production and potential as the platform to create quicker a combined company more diversified by product and geography, and therefore safer.

Good find, flex, thanks for sharing. Martin Copeland speaks and comes across well. Indeed, well worth a listen. Is the government listening?

Appropriately licenced…

Current global oil consumption is around 104 million barrels of oil per day. OPEC project that by 2050 it will INCREASE by some 19% to 123 million barrels per day. https://oilprice.com/Energy/Energy-General/OPEC-Says-Global-Oil-Consumption-Will-Hit-123-Million-bpd-by-2050.html

Most consumers care little about from where the hydrocarbons they consume come out of the ground. It is just something people don’t think about. Whether this, both the increasing consumption levels and consumer’s indifference, is “right” or “wrong” is a moot point. It is just how things are and very likely will be.

What is relevant is that limiting the UK’s production of approximately licenced and economically recoverable oil and gas will not change one iota the level of global consumption, but it will harm the UK’s economy and security, and increase the emissions associated with the consumption. Why would anyone with the UK’s interests at heart want to limit the UK’s licenced oil and gas production? The assumption has to be that people taking such a position are either against the interests of the UK and/or have an agenda they are not being transparent about.

Indeed, frac, more doublespeak in almost every word:

“Our mission to make Britain a clean energy superpower is about getting off expensive, insecure fossil fuels controlled by petrostates and dictators, and replacing it with clean homegrown energy that we control. It presents a huge opportunity to boost our energy security, protect consumers, create jobs, and drive growth, while tackling the climate crisis.”

The majority of oil and gas imports come from Norway and the US - these are Petrostates or dictatorships?

No mention of costs. Maybe it’s bound up in “protect consumers”. Maybe not. Tackling the climate crisis… pull the other one.

Oct, whilst I'd like to think I'd get Shanks' attention I fear I would not. Borthwick's letter, whilst couched in diplomatic/political speak, actually is hard hitting. He's telling Shanks he does not know what he's talking about and that he should be more careful playing fast and loose with the livelihoods of thousands.

Aim, I just sent the below to The Times. Letters to them must be "exclusive", so I won't sent to other papers, but you or others could re-word a little and send elsewhere.

Sir, The callous disregard and arrogance of Energy Minister Michael Shanks' claim last week at the Scottish Affairs Committee of “no material difference” between oil and gas imports and production from the North Sea betrays Labour’s true colours and intentions. Contrary to what Starmer and Reeves say, Shanks’ comments further confirm Labour do not truly place economic growth as their top priority.

Through extending and increasing the Energy Profits Levy (EPL) a “windfall tax” where “windfall” conditions no longer exist since a long time, Labour is effectively expropriating private property. This has spooked investors. Without the EPL, which gives a total tax-take of 78%, the North Sea could remain a highly investible proposition. It is government policy and this punitive tax regime, not “the geology” as Mr Shanks fancifully claims, which is actively accelerating decline in The North Sea. Labour is demonstrating that fundamentally they are an anti-business and anti-economic growth government which cannot be trusted. If they can do such things against one industry they could and would do it against others. Anyone, considering investing in the UK would be well advised to take good note of this.

Mr Shanks’ ill-informed and deeply flawed comments, whether reflecting official policy or careless talk will cost jobs.

Yours faithfully,

The callous disregard and arrogance of Shanks' comments betrays Labour’s true intentions. Unless Shanks issues a clear and unequivocal correction, the comments he made and their implications, as per my final para, need to be continually used against him/the Party. Shanks must know comments have consequences, that ill-informed careless words cost jobs.

They have effectively expropriated private property by increasing and continuing a windfall tax when the conditions no longer exist (let alone that the government increases taxes when prices go up but don’t support when prices fall, as during Covid)).

Another way to attack Labour is to use this to highlight their anti-business tactics and, contrary to what they say, that they do not really want to grow the economy. If they can do such things against one industry they could and will do it against others. Anyone considering investing in the UK should be aware of this and that this is a fundamentally anti-business and anti-economic growth government which cannot be trusted.

My first thought/hope on seeing the "no material difference" headline was it meant wherever extracted makes no material difference as it is the consumption which counts. Yeah, right...

However economically, security-wise, and environmentally illogical, this Shank's statement reflects Labour's position. Rather than setting fiscally reasonable conditions and letting the market decide if the geology allows further development in the NS , they prefer to maintain the EPL and stifle development this way. Labour must know that changing the EPL now would benefit the country longer-term but that almost certainly it would not generate more tax revenue before 2030.

Reform and Tories may prefer Labour stick with their current position, as this way the policy difference will be bigger at next election.

Unless something changes, and assuming Miliband allows, Equinor/Rosebank and Shell/Jackdaw (and others, such as EnQuest/B&B) aside from re-applying for consent are unlikely to hasten significant actual new extraction before knowing the successor fiscal conditions. Why would they?

The industry's line with Labour is change the EPL now to encourage investment, for all the reasons listed in Borthwick's excellent response-letter to Shanks, or lose jobs and the supply chain and have the NS go off a cliff edge into irreversible decline.

Labour are sort of hedging their bets; take the maximum tax revenue they can until the next election, and then maybe dangle the carrot of more favourable conditions if they are re-elected. The "oppositions", the industry, the workers/unions, need to make this approach unappealing for Labour - that if they continue with their current approach then whatever changes they later offer will be too late to gain support and harvest votes. What is the best line of attack to pressurise Labour to make changes before 2030, at the least to provide investment allowances (see Sarwar's recent comments) and state what their successor fiscal regime would be if re-elected? I assume as contained in Borthwick's letter. Let's see how Shanks responds. (Could Corbyn's new party announcement be the catalysts that persuades Starmer to stop the mixed messaging and really, through actions, be more supportive of the NS?)

In meantime and until 2023 or changes, the only avenue to increase shareholder value remains via... an accelerated use of tax credits thru deals.

Loch, computer says;

Amount gas exported: ~21% of UK production (~75 TWh in 2021).

Reason:

Market logic → highest-price sales abroad (mainly to BE and NL)

Domestic production cannot meet internal demand anyway.

Pipeline interconnectivity enables flexible trade.

Seasonal pricing and storage shortages drive exports in summer/imports in winter.

This, “independent” report is diametrically opposite Shank’s: https://oeuk.org.uk/policy-versus-geology-new-report-reveals-165bn-choice-facing-north-sea-future/

“Policy versus geology; new report reveals £165bn choice facing North Sea future.” “OEUK said the report highlights a critical distinction between a natural geologically driven decline and a faster decline driven by policy.”

Having a large majority can mean the troops stay less in line, especially with Captain Flip-Flop in charge.

Improvements to the EPL feel less likely now, which means deals using tax losses is for the moment the only real game in town to create shareholder value. Labour (Miliband) look likely to use fiscal policy to stop drilling even in licenced fields. I too think the Serica deal could be simmering away out of the glare of RNS requirements. The previous announcement about deal discussions always felt forced.

I see the ex charity organisation and Modern Studies school-teacher employee on top of being an energy expert is now also a geology expert. It’s politics, I know, but how they can churn out this BS and keep a straight face is beyond me. https://www.agcc.co.uk/news-article/energy-minister-claims-there-is-no-material-difference-between-oil-and-gas-imports-and-north-sea-production

I found this "Supplementary guidance for assessing the effects of downstream scope 3

emissions on climate from offshore oil and gas projects": https://assets.publishing.service.gov.uk/media/6853fa3d1203c00468ba2b15/Supplementary_guidance_-_Effects_of_Scope_3_Emissions.pdf

The below is the final paragraph:

Decision on whether to agree to the grant of consent

Section 1.7.2 of the of the Offshore EIA Regulations’ Guidance sets out what information will

be considered when reaching a conclusion on whether there are any significant effects of the

project on the environment. When reaching a decision as to whether agreement should be

given to the grant of consent the Secretary of State will consider the environmental effects of

the project (as required by the Offshore EIA Regulations) and will form a view of the overall

balance of advantage between any potential significant effects on the environment and wider

benefits to the interests of the nation and any other relevant factors in proceeding with the

project. In reaching this view the Secretary of State will usually consider, amongst other

matters, the severity, extent, understanding and duration of the significant effects, the

Government's overall energy and environmental objectives, and the potential economic and

other advantages of the project proceeding. This includes an assessment of the extent to

which the project aligns with the Government’s stated objectives for the future of the North

Sea.

Surprised et al, on the recently issued new guidance issued for environmental impact assessments https://www.gov.uk/government/news/new-guidance-issued-for-environmental-impact-assessments: “When deciding on an application, the Energy Secretary will consider the significance of a project’s environmental impact, while taking into account and balancing relevant factors on a case-by-case basis - such as the potential economic impact and other implications of the project.” What does that actually mean? Does this new guidance really provide the claimed “clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling”? The conditions to be considered seem so wide and vague as to be meaningless. What, in reality, has this whole legal process and new guidance provided? Seems just delays whilst handing wide discretion to Miliband to potentially further delay and block already licensed fields. Anyone have a different view?

(Ironically, the actual use/burning of the oil and gas, the thing the legal process and new environmental impact analysis requirements cover, is largely irrelevant as wherever oil and gas comes from the use/burning effect is pretty much the same. The heart of the issue is and remains the consumption/use of oil and gas and not its extraction. Will imported hydrocarbons require a certificate confirming Scope 3 emissions were considered at the point of the extraction? Clearly not, and even if they did, what would it change? The whole situation comes across as a farce.)

And following on from this new guidance and “clarity”for environmental impact assessments, IF, as the government statement implies, the Scope 3/Finch-case environmental impact assessment impediment has now been removed for already licenced fields, what remains is the fiscal regime aspect. At the current fiscal conditions why would companies risk to invest now in new fields to produce more to pay more tax at 78%? They would better wait until/if there are changes to the fiscal conditions. Eventual re-licence consents will have time constraints, but these could be stretched out. Labour/The Treasury must know at current conditions the NS is uninvestible. The question is do they accept to change the fiscal conditions “soon” or instead hold this over as an issue and bargaining chip for the next election?

Regarding the recently issued new guidance issued for environmental impact assessments https://www.gov.uk/government/news/new-guidance-issued-for-environmental-impact-assessments: “When deciding on an application, the Energy Secretary will consider the significance of a project’s environmental impact, while taking into account and balancing relevant factors on a case-by-case basis - such as the potential economic impact and other implications of the project.” What does that actually mean? Does this new guidance really provide the claimed “clarity on the way forward for the North Sea oil and gas industry, following last year’s Supreme Court ruling”? The conditions to be considered seem so wide and vague as to be meaningless. What, in reality, has this whole legal process and new guidance provided? Seems just delays whilst handing wide discretion to Miliband to potentially further delay and block already licensed fields. Anyone have a different view?

Ironically, the actual use/burning of the oil and gas, the thing the legal process and new environmental impact analysis requirements cover, is largely irrelevant as wherever oil and gas comes from the use/burning effect is pretty much the same. The heart of the issue is and remains the consumption/use of oil and gas and not its extraction. Will imported hydrocarbons require a certificate confirming Scope 3 emissions were considered at the point of the extraction? Clearly not, and even if they did, what would it change? The whole situation comes across as a farce.

First Labour had to pass the Rubicon of openly accepting they want to encourage more indigenous production. This appears to have happened. Now the companies need to make it clear they can only proceed to invest if the fiscal regime is satisfactory. War in the Middle East and oil still below $80 should add strength to the argument.

Maybe Miliband agreed because of horse-trading resulting in wins elsewhere?

https://www.newstatesman.com/politics/2025/06/ed-miliband-keeps-winning

It is going to be interesting to see how Miliband manages to approve these applications, and at the same time save face and stay in his post. Or could chicanery and duplicity be employed to create further obstacles to block these applications?