Member Info for Dumbly

“To call his plan ‘ambitious’ – as so many still do – is to deny reality. It’s a demonstrable fantasy.”

https://www.spectator.co.uk/article/milibands-empty-energy-promise/

AB was talking freely, ad lib, in the first part of the interview but when it came to talking about the UK’s fiscal conditions and the windfall tax he was clearly glancing at notes to follow a scripted response. Not sure what to conclude from this but it did look odd, and lost some of the impact.

Stevo, what you say makes sense and I agree. All the same… it feels deals more likely once the uncertainty around capital allowances is removed. Perversely, if capital allowances are reduced could the value of existing production actually increase? Although, the bigger current issue is the price of Brent, which obviously is completely disconnected from the upcoming budget.

Stevo, if your scenario of no loosening of the tax noose until Spring 25 comes to pass, then there could be a period after the end October budget for EnQuest to purchase “UK portfolios with limited capital reinvestment programmes” at the lowest likely price.

Romaron, this is the type of document I wanted. It makes clear the financial outcomes of the policy choices. I am with Sek that it will be read. Whether it will improve things is another matter.

I just read the document, and on EPL and tax rate and with regard to related posts today, I noted:

“Despite reassurances from all parties, industry has little confidence that the windfall tax will be unwound in 2030. Therefore, they are embedding a 78% with limited capital relief into their long-term assumptions and decision-making processes.”

“For investors today, including the Financial Institutions themselves, EPL is assumed to be applied in perpetuity. This significantly undermines project economics and erodes balance sheet strength, reducing liquidity beyond sustainable levels for many companies. Again, given the nature of the EPL’s creation and extension, the reassurance of a return to a 40% headline rate provides industry with little confidence”

Could add buybacks/dividends as main factors also with company’s control.

Aim, unless something changes, why would the SP change? The main change factors/drivers outside the company’s control are POO and UK fiscal policy. Main factors within company’s control, more or less, are acquisition of production in the UK and some deal possibly in Asia.

Krack, All the signs are that taxation will remain at current/planned levels indefinitely. A ceasefire deal would not change anything. I say this as any “windfall” fell away a long time ago, yet the EPL will stay in force until… 2030. It’s all a big and bad joke. The EPL, the ESIM. It also harms the UK’s reputation; first we take Oil and Gas and then we take…? I am with you that such deception and theft should not be allowed, but seems there are no grounds for a challenge. I also say the current/planned tax rate will remain because why would introducing a windfall tax be combined/connected with aligning with Norway’s 78% tax rate? So, the most likely conclusion is that the EPL will eventually go, but a 78% tax rate will be maintained using whatever BS justification they want. This, unless the reality of the outcomes of driving out investments in the oil and gas sector forces a change of government policy.

Kg, logically to catch any windfall the EPL

should, if possible, be only applied on profits above the ESIM thresholds. Instead the EPL is applied on all profits. The whole thing is a “joke”. This includes the way the ESIM thresholds were set by not adjusting for inflation the prices over the last 20 years.

Simplyme, careful for what you wish for… for the EPL to be removed per the ESIM requires BOTH oil AND gas prices to be below the threshold for all of two quarters. The game is rigged so it can’t happen. Well, if it did there would be bigger issues at play which would probably be even worse than having the EPL.

And while we are at it… planning consent for wind turbines and pylons etc should also be required to considered the emissions created from the hydrocarbons used to make and position them.

Labour to let Rosebank oilfield plan die in court

https://www.thetimes.com/article/0697e09d-53ae-4da7-a2ab-8fd2fe6945e2?shareToken=48090c972c2f4fcb79301bafe2ee9fcc

Spin, I could well be wrong, but I read this differently, bring that the intention here is to raise the profile of this issue and the risk of companies just giving up on the UKCS and all the dangerous consequences this would represent. Turn the tables by saying, it’s just too risky, we’re off, and then wait for the government to change their tune. And, if they don’t, to really not proceed with new fields.

Plus, let’s start legal action against the import of hydrocarbons. Surely, if extraction from the UKCS must factor in the climate impact of the emissions from burning the resulting hydrocarbons, then the exact same consideration must be applied to imports. And, logically, the outcome of both legal actions should be the same. If there was a risk oil and gas imports being banned I somehow doubt the government would risk to step back PP-style.

So far this morning there has been an 8% difference between highest and lowest SP. What is causing such swings? Buys n sells, naturally, but based on what? On information? Trading? Manipulation? Answers on a postcard please.

Minister for Energy Michael Shanks sounds a decent fellow, but at 36 and with a degrees in History and Politics and main previous working experience at a charity and as a Modern Studies school teacher, is he remotely qualified for the role he now has? There must be a lot of Imposter syndrome in Westminster.

The minister is responsible for:

Great British Energy

renewables and biomass

energy systems, the grid and networks

energy market reform including Review of Electricity Market Arrangements

North Sea transition

energy security, resilience and preparedness

https://www.gov.uk/government/people/michael-shanks

https://en.m.wikipedia.org/wiki/Michael_Shanks_(politician)

It is not clear to me how to interpret this in terms of what it means for the industry.

https://www.gov.uk/government/news/certainty-for-oil-and-gas-industry-in-light-of-landmark-ruling#:~:text=The%20government%20will%20not%20challenge,and%20Rosebank%20have%20been%20withdrawn.

I agree completely, Stevo

This is also what the company has repeatedly stated as being the key part of their plan/strategy.

As romaron recently posted, it’s highly likely proforma agreements are in place and waiting for the outcome of the budget to finalise and progress them.

Starmer repeated today in Germany, "Growth is the number one mission of my government.”

Condemning the UK’s oil and gas industry to a premature demise is not going to reduce the UK’s oil and gas consumption but it will reduce jobs, tax revenues and… “growth”.

And I think 60p would be a good price for both sides. 😂 😂 😂

For Pete’s sake!

Frac, We/all know it is ideologically-driven economic illiteracy to effectively stop thru fiscal policy investment in new production in the NS. Doing this worsens the balance of payments, weakens energy security, destroys jobs, increases emissions, and will end up generating a lower total revenue take for HMRC. Starmer has proved versatile at U-turns. With the narrative of the bigger than led-to-understand economic mess the Tories have left, he has the plenty of cover for a pragmatic changes on fiscal policy and maybe on licensing too. Unless, that is, Labour believe the industry is bluffing and will invest anyway. This is why I would like to see a company by company and/or field by field list of what will not happen if the fiscal policy remains as is and with the changes announced. The consequences of the investment which would not happen needs to be shown across the whole supply chain of companies, as well as the tax revenue impact. A reputable body needs to confirm if the stated investments don’t happen the declared outcomes are near to certain. Maybe this is being done behind the scenes. I’d like it put in the public domain.