Member Info for Dumbly

Verbose semi-rant incoming. Feel free to change channel 😊.

Of course, any ideas most welcome on how to turn from just words on a BB to something which could create action. Worth sending to IR and asking if EnQuest will now be more vociferous or still go via the industry bodies?

Energy is the economy! If economic growth is the main challenge, then getting energy policy is essential.

The Labour party before an election cannot change their position on abolishing the EPL-related investment allowances. It is almost the only string they have left to their tax-revenue raising bow without increasing income tax/NI. The Conservatives will make energy policy a (the?) major differentiator at the election. Just, as the fathers of the Windfall Tax and its… extension, extension, extension, they can hardly claim to be the champions of the sector.

The UK is blessed to have the hydrocarbons it has and the O&G industry is a national treasure. This message needs to be shouted so people willing to hear reason understand this. Instead, the industry is portrayed and treated by many with disdain, like a pariah-industry.

Could it be there is a silent majority who understand “all this”, or who would be willing to understand it, and for whom it is a very important issue?

The O&G industry now has no reason to “hide” or be coy. The industry can’t leave the Tories to fight their battle for them. The industry needs to frame this not as a political issue but a national issue (as per their recommendation to create some sort of energy committee above the parties, as the OBR, CCC). Without overtly aligning to any political party, they need to say Labour has made their position clear and the assumption is Labour will win the election. Therefore, investment from the industry will quickly further slow, and once the allowances are actually removed from the Windfall Tax, where the conditions of a windfall no longer exist, the investments will soon after stop. Ask the question, why would anyone invest in an industry which is being nationalised and closed down through fiscal policy? Make it crystal clear there is no bluffing or threat here, just a question of cause and effect.

The industry, better probably from the Independents on which the NS relies than from the Super Majors, needs to be specific with the investments which will not happen. The consequences need to be spelt out. Name the fields which won’t be developed and put numbers on the decline in GDP/growth/jobs, the increase in carbon emissions, decom brought forward, and the reduction in energy and general security. The fragmenting and disintegration of the supply chains essential to enable a successful energy transition must be made clear. They should provide OBR-style numbers, audited/validated by some reputable company/body, showing what taxation revenue would be if the investments don’t happen. The numbers need to show, perversely, the outcome will be less tax revenue in the medium-

Views on whether for the sector, and EnQuest specifically, it is likely to be better to have a General election sooner or later? This is with the assumption Labour will form the next government. Earlier should mean sooner having a government which has to face reality and maybe then adopt more pragmatic policies. Later means the EPL investment allowances should be in place for longer, and this feels the better option for the industry.

I wonder whether AB is a non-dom. I imagine he is - why would he not be if he could be, and it looks like he has the conditions to be. Naturally, that's his business.

However, I then wonder if AB is a non-dom whether the Conservatives' changes to the non-dom regime could change the way he behaves - could be now be more publicly vociferous and forceful in highlighting the consequences of the EPL, its latest extension, and Labour's plans to remove the investment allowances?

Labour will go into the election with this closing the loopholes “mantra”. It, energy policy in general associated with removing the investment allowances, will be a main differentiator between Lab/Coins. Assuming Labour get a working majority, the question becomes at what point after the election Labour will change their tune, because with this tune investment really won’t be there and without the investment the amount to tax will get less and less and quickly become zero if decom activities are brought forward. And it is not just about tax income, but also… jobs/growth/balance of payments, higher carbon emissions, security (both of supply and security in its wider sense). They, both main parties, surely must know/understand the situation. Starmer has proved agile at 180s, and being in government will cause shifts in the relative power position of Reality-Rachel and Ed-the-ideologue.

Vor, I agree with what you state as being the main/general reason. However, the EPL revenue also helps short-term with the books, and the previous rate increase and deadline extension and the rumoured further date extension is tinkering round the edges and feels more driven by creating the theoretical fiscal headroom to get a tick from the OBR.

Romaron, re the election date, and I've not heard any media today, but if Sunky's biggest and defining promise is to get an illegal bum on a plane seat arriving in Rwanda, then it's best he calls an election soonest and avoid the embarrassment of not delivering on this.

Jeffrey, my guess was they would not extend the date for the EPL, but the rumours are different. The benefit it gives the Tories is the additional fiscal headroom it provides in getting the OBR to sign-off on their budgetary plans (this is why I refer to the O&G sector as being a sort of RBL facility for the Tories). The Tories big O&G sector fiscal differentiator with Labour is they say they will maintain the investment allowances Labour call a loophole to be closed.

There is a saying in North Macedonian that goes "да му умре козата на комшијата", roughly meaning "(I wish) the neighbour's goat dies". Greece and elsewhere in The Balkans has a similar saying.

It comes from a story about a poor man whose goat unexpectedly dies. Soon after, he encounters a magical being that offers him one wish. But instead of wishing his goat back (or some other gain), the man wishes for his neighbor's goat to die too.

At a glance it might look like a regular expression about envy or jealousy, but it's something more than that. It's often used to describe the mentality of the people, that deprived of success find solace in the failure of their peers and can only find satisfaction through schadenfreude, creating a culture that hinders progress of the society as a whole.

The Tories via the EPL are using the Oil and Gas sector as their own sort of RBL facility. They now care little about "growth" as they know they can't create it before an election. Their thinking is along the lines of "better a dead goat (the "economy") than my neigbour has a goat."

Better an election ASAP so Labour can face the reality (and the unions) so policy and decisions can be driven more by that than politics and ideology.

The Tories' election pitch will be with us the awarding of licences and the investment allowances will be maintained to allow the sector to continue to invest (with all the benefits for the sector and wider community and country), whilst with them licences will stop and the removal of the investment allowances will destroy the sector (with all the downsides for the wider community and country). And, as said, if the Tories won the election, then they would look to maybe implement part of the outcome of the oil and gas fiscal review. They may add this last bit into their election pitch.

Yep, forked-tongues all over the place. My guess is the EPL date will not be extended in the Spring Budget, and that the leak to Bloomberg was a ploy to be able to present, to the few people who will have noticed it, doing nothing as a positive. Next to nobody interested in assisting the sector and who would have voted Tory would vote for others because the Tories did nothing now with the EPL. And why would the Tories reduce now the EPL and risk raising the issue and potentially alienating people who think helping the sector is bad news? If the Tories win the election, which they won't, then they would think more in terms of helping really the economy. For now it is all about voter-attraction management.

Nice articles, romaron.

I particularly liked:

I can finish no better than with a quote from the Greek historian Polybius who wrote c. 140–130 BC:

‘So great is the difference both to individuals and to states between

carefulness and wisdom on the one hand, and folly with negligence on

the other, that in the latter case good fortune actually inflicts damage,

while in the former disaster is the cause of profit.’

And... this week's number one is:

1. Supporting oil and gas workers

https://www.pressandjournal.co.uk/fp/politics/scottish-politics/6387280/tories-election-battlegrounds/

"Rishi Sunak tells Scots only Tories will protect 90,000 North Sea jobs"

https://www.msn.com/en-us/news/world/rishi-sunak-tells-scots-only-tories-will-protect-90000-north-sea-jobs/ar-BB1j9Bqx

After Sunak making these comments it would be inconsistent, indeed absurd, if next week Hunt extends the EPL. The Tories need as much of Scotland as they can get, and making comments like this and then taking contradicting actions would lose votes big time. Better to say nothing. Was yesterday's rumour some sort of decoy - give the impression something will be done then not do it and try gain favour?

Then create a path to a fiscal regime in harmony with this objective dear Rishi and Jeremy.

Article published today:

https://www.pressandjournal.co.uk/fp/politics/6389177/rishi-sunak-oil-aberdeen/

The CEOs themselves must come out and shouting spell out what will happen if the EPL is left as it is (forget extending it). Which projects won't happen. The economic, jobs/social, and emissions impact. Not threats, just certainty about the flight of capital elsewhere.

As said, would be good if NS bosses, especially the CEOs of the Independents, stated publicly which specific investments will not happen if the EPL is left as it is or made worse for them. They should include the long-term $ and jobs value at risk.

We are saying similar things, romaron, including that the companies likely to keep the NS alive need to be specific with what they will do, and not do, and the ramifications, if the fiscal regime and general business environment is not made, at the very least, less hostile towards them.

Not now, not… ever 😂

Romaron, on another day getting out on the other side of the bed I could reach similar conclusions as you and view the manifesto as wishy washy and wimpy. Instead, considering the OEUK is a lobbying type of organisation which has to work within the political sphere and according to the political norms, my initial impression is of a respectful yet still strong statement.

Under the section “Choose a secure future” the manifesto states the OEUK members could “Deliver £200 billion of private investment over the next decade”. The section then lists the fiscal regime requirements to enable this. What I would like to see as a follow up is, as far as possible, the list of investments to reach this amount and then for the investing companies themselves to come out and state that without changes to the current fiscal regime they will not make these investments. Not now, not never. If the companies, themselves directly, their heads, are not prepared to plainly state the consequences of continuing with the current fiscal regime, let alone an even worse regime as Labour have communicated, then they would be complicit in their own fate. The heads of these companies are the ones I would expect to show their balls (as Linda Cook has done, matching her ballsy talk with ballsy action). OEUK, an industry association, have politely and sensitively set the scene, now the heavy hitters holding the cheque book need to swing into overt and high-profile action. This includes AB.