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As done for non-doms, the OBR should report to the Treasury (and the public) on their projections for tax revenue according to the various fiscal scenarios for the O&G industry. And maybe also include indirect industry tax from workers and companies in the supply chain.

The public needs to know the impact of decisions on the public purse. And on emissions.

Gary Smith must have the ears of Starmer and Reeves. Question is are they listening and understanding?

Looks like the expected extra tax revenue from the changes to the non-dom regime won’t be there as non-doms scarper away from the UK. If the reduction in economic activity due to their absence is added in the overall effect on tax revenue and growth will be negative. Similar looks likely due to putting VAT on school fees. Similar looks likely due to the EPL with the planned increase to 38% and removal of the investment allowances. One hopes Labour gets the message. More tax delivers less investment and less growth. Is the market value of the Independents on Labour’s radar? They should be as the current values are due to the fiscal conditions and serve as precursors for an almost total reduction of new investment. If RR really believes in “if growth is the challenge, then investment is the solution”, then she should be listening to what the industry, analysts, academics, bankers, unions are saying, and modify the current punitive tax regime.

Krak,

“The Conservatives missed a trick.

The Tories should have passed a law making punitive taxation illegal – establishing that taxes could only be levied or increased where they could be proven to increase revenue to fund public services. An incoming Starmer government could have repealed the act, of course, but in doing so it would have been admitting that it was levying taxes not to fund public services but to punish us. What an opportunity lost.”

https://www.spectator.co.uk/article/is-labours-non-dom-crackdown-backfiring-already/?status=none&utm_medium=email&utm_source=CampaignMonitor_Editorial&utm_campaign=LNCH%20%2020240926%20%20House%20Ads%20%20SM+CID_3d424b6fb9d0a43b9a69271bd38f3375

I know we have been over this before, but rather than just lobbying the industry should attempt to take out a legal challenge to the EPL. The EPL is clearly a Windfall tax; the justification when introduced states this and all the politicians refer to it as a Windfall tax. Including the current Chancellor. At the least it would elevate the issue, cause some focus and tie-up government resources. Taxing an industry for a declared reason which is demonstrably not true surely cannot be beyond challenge. Or, at least, beyond an attempt to challenge. If the challenge is not accepted as having merit, what’s been lost? The government could have said we decided to increase tax on the sector to fund the transition, but they did and have not said this. They said, and say, the tax increase is due to a sustained price of oil increase beyond the 20-year average which has caused on-going exceptional profits. Neither thing is true and can be evidenced in the courts. Why does the industry not at least try? What is there to lose at this point?

Parliament is sovereign, but this does not allow it to do things based on false pretenses or, let’s call it what it is, on lies.

In case there was doubt: https://www.ft.com/content/a40c3206-0248-4eea-ac0b-24fe7b2f4834

Where was this said yesterday and by whom?

“Growth is the challenge... and investment is the solution,”

Thanks, Stevo.

I assume sellers will expect a buyer to share some of the value of the tax shield with the seller and I further assume the pressure on a buyer to do this would increase if there is more interest for existing production if there is less interest in new UK field development because of changes to the investment allowances conditions. As you say, tho, for new production opportunities it may be more a case of UK versus elsewhere. Although, take EnQuest and Serica, who both have tax credits to exploit, surely it would be better/easier/quicker for them to buy UK production than make new production investments abroad.

Agreed, a “good deal” as you indicate would, well should, generate a significant SP re-rate.

Hopefully this announcement will help concentrate minds at Labour. As Stevo said, Bressay, Rosebank, Cambo need to be put firmly and publicly on hold to further concentrate minds in understanding the consequences of the existing and planned fiscal policy.

“The Forties Pipeline System - which connects more than 80 offshore gas and oil fields to the UK mainland - may shut down as early as 2030 if plans to extend the windfall tax suffocates investment.”

“Gary Smith, general secretary of the powerful GMB Union, which represents many offshore workers, said: “Successive governments have taken a hostile position and a fundamentally dishonest position on the realities of oil and gas. We are going to need oil and gas for decades to come.”

“What is totally counterproductive from a Labour perspective is taxing the industry out of business and putting bans on new exploration. You’re going to create a cliff-edge for the industry which will have devastating implications.”

https://www.agcc.co.uk/news-article/forties-pipeline-system-could-close-10-years-early-under-labour#:~:text=The%20Forties%20Pipeline%20System%20%2D%20which,could%20run%20until%20the%202040s.

Stevo, regarding your 2023 post yesterday, that’s why I can’t see deals happening before the budget. If the investment allowances are reduced/removed it’s likely new development would be curtailed and there would then be more buyers chasing existing production and therefore its value, what other are prepared to pay, should increase. Makes sense?

Thanks, romaron. I checked the Oxford English Dictionary’s definition of twaddle: “The output when a 37 year old history graduate whose work experience is with a charity and as a high school teacher educates oil and gas company CEOs and executives about the UK energy sector.”

The audacity of this guy to say the industry has to look beyond the EPL. How the hell is this person going to give fiscal conditions certainty past the next election?

Labour say they are listening but will still do what they have said they will do. It’s a game of bluff at this stage. The lobbying will intensify until the budget. Labour will likely stick to their plans and reduce the investment allowances.

Does anyone have access to this article and can share the content?

https://www.energyvoice.com/oilandgas/north-sea/559942/north-sea-offshore-sector-under-threat-from-labour-policy-oeuk-says/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20Daily%20Newsletter%202024-09-19&utm_term=Energy%20Voice%20-%20Newsletter

I am creating a new movement. The “Noilers”. They will be to hydrocarbons what Vegans are to animals. I’ve no beef with Vegans. I admire much of their views and their conviction. Some get mighty close to not consuming or using any animal-based products.

“Noilers” are people so convinced of the evil of hydrocarbons and the existential threat they pose, that they have committed to strive to not use anything in any way whatsoever connected with hydrocarbons. So nothing which uses hydrocarbons or was produced using hydrocarbons.

I’m currently looking for Noiler volunteers to appear in a sort of promo-documentary about Noiler life. The aim is to educate the wider public about the features and benefits of Noiler life. I approached members of an Amish community, but they all said being Noilers was too hard core for them.

“Relying on electricity interconnectors adds to market risk“

https://watt-logic.com/2024/09/17/relying-on-electricity-interconnectors-adds-to-market-risk/

0924

Man, final para of the link roma posted today at 0904.

“Boosting the oil and gas sector will increase the supply of gas, bring down prices, improve productivity and create a platform for growing the whole economy.”

Not sure how boosting the UK oil and gas sector will bring down [oil and gas] prices. The reason to boost is more to retain jobs and the wider supply chain, increase GDP, improve security and reduce emissions.

“Weirdness – in all its forms – is neither good nor bad. It doesn’t matter very much, for example, that Ed Miliband is palpably odd. It matters that the energy secretary is hopelessly incompetent, ideologically barmy, and committed to an insane energy policy. I suspect his oddness will matter even less when the lights start going out. We’ll be begging for anyone to rescue us, no matter how weird that person might be.”

https://www.spectator.co.uk/article/theres-no-shame-in-being-weird/

Last week @energygovuk asked the ESO to develop advice on how to achieve a decarbonised power system by 2030. Read my open letter to learn how we’ll develop our plan, how it will interact with other energy reforms and how we’ll engage with industry 👉bit.ly/4dTliJC

And, as a follow-on, Fintan Slye’s “Open Letter to Industry”:

https://www.nationalgrideso.com/document/324641/download