Member Info for Dumbly

Last night: Ayes 293 Noes 211

https://hansard.parliament.uk/Commons/2024-01-22/division/DB3CCE18-DD50-4E5C-B7F1-84B5307C50C2/OffshorePetroleumLicensingBill?outputType=Chart

Aim, the “affiliate” company is in Indonesia. No other detail available worth mentioning.

When AB refers to Magnus and Kraken and new licences, does that mean even new drilling in those fields requires new main licences? I thought new wells on fields with an existing licence was fairly straightforward and not considered a new new licence? Is he referring to new new licences to tie-back to existing infrastructure?

And Bressay, has that not already a licence?

something does not add up, l7. if this se asia affiliated company’s very “big discovery” is important enough to use as one of the 4 reasons ab gave in the cnbc interview to support his comment 2023 had been a good year for enquest then, logically, there should have been an rns? or, at least, a press release? not sure i can be ****d to ask ir about this. i expect to be underwhelmed when the reality of the likely benefit for enquest is revealed.

L7, you said AB’s “comment on a gas find with a partner was interesting but unclear”. He referred to “an affiliated company” but did not say it was gas regarding them. He said “we have an affiliated company in SE Asia which had a very big discovery which is moving to pivoting our businesses”. Also in the recent CNBC interview he focussed on Veri, pivot to gas now at 20% in UK. That’s what I mean by AB “spinning”. Who is this “affiliated” company? Why say SE Asia and not where and who? Commercially sensitive? If so, then say nothing. What have they discovered? What are the details of EnQuest’s participation in the “affiliation”? Has anything else been said about this before? If potentially so important, why not? AB has a habit of diverting attention and being unclear like this, throwing out good vague news which does not result in… such good news, and the market hates behavior like this.

Voice, Frac and others, frustration was in good part behind my comment. However… can company performance and SP really be separated out over such a long long period? (The fiscal regime improved marginally in 2023 due to the ESIM, yet the SP almost halved.) AB is not a spinner and generally understated with his comments. The spin aspect I felt in the interview was that he was diverting attention to Veri, increased gas production, and the very large discovery by an affiliated company in SE Asia (have we missed that, who is it, what are the details of the affiliation?) rather than on what remains EnQuest’s core activity in the UK. His view that it was a good year for the company without any reference at all to the halved SP and the reasons for this, and what's being done about it, jars with me. Like the SP is not something he wants to directly get involved with and address head on. Maybe not the right forum? Or maybe the right forum to get the message out there what EnQuest is targeting to do in the UK. I would have also preferred he was stronger in what he said about the ongoing impact of the UK fiscal regime and how difficult to make investments there. Just saying little will happen in an election year and that “the government is working hard, maybe, to try and mitigate some of the decline in investments” felt too passive. He comes across as a sort of wise industry commentator, rather than a hungry CEO (which he probably no longer is…) wanting to invest in the UK but frustrated by the fiscal regime and the UK politicians’ intentions towards the UKCS.

AB: "We've had a good year last year". Well, according to the SP, which in the last year has almost halved from 23.6 to 13.5, no, we've not had a good year! AB puts on a calm and serious brave face, which is what's wanted, but there is often the feeling of a tad too much spin, bordering on the spiv-like spin. Am I being too harsh? Could AB be Mr Hyde to Stevo's Dr Jekyell 😊 😊 😊

Now scheduled for next Monday: https://www.parallelparliament.co.uk/bills/2023-24/offshorepetroleumlicensing

Hehe, Auson, now we are all being so nice and polite to each other. And that is appreciated.

OK, thanks, I take your point that EnQuest is thinly traded and the holdings of some posters could therefore move the SP. Can you agree if I re-phrased by saying what happens on the board won't have a significant and long-term impact on the SP? And if not, and others agree with you, then I'll re-frame my thinking on this subject, which is that the big movements are driven by institutional investors.

Anyone who thinks what happens on this board has but a miniscule impact on the SP is deluded, The big things we know about which will impact significantly are details of shareholder returns and some M&A activity (and the company has repeatedly confirmed they are working on these two area). If a poster is considered constantly irritating the best is to ignore them or, better still, filter them. We all have to ask whether we have become too emotionally attached to any company/share as, generally, this is not good.

Stevo, I’ve also found your posts helpful, Maybe at times inconveniently enlightening but better that than blissfully ignorant. Well, probably. I’d also appreciate if you stick around and continue posting please.

Below an extract from Offshore Energies UK boss David Whitehouse’s interview published today on Energy Voice: https://www.energyvoice.com/oilandgas/545250/energy-sector-to-work-with-every-political-party-in-2024-election/?utm_source=email&utm_medium=sharelink This indicates a more positive outlook for the sector independently from the outcome of the General Election. Some words from Labour to encourage the sector would be well received. Something showing a faster path to this “fair tax regime” would be a real bonus.

“The signalling from Labour and the Tories paints very different pictures of how the oil and gas sector will look depending on which way the ballots fall.

However, despite the wildly different messaging from the two front runners, OEUK says that the UK’s political parties are largely on the same page when it comes to the future of the energy sector.

“I think increasingly throughout the year the conversation moved to one that had become much more recognising that the way as a county that we will be successful in getting our sectors together,” Mr Whitehouse said.

Mr Whitehouse commented: “We need surety, we need long term planning and we do need, when conditions are right, we need a fair tax regime.”

Delivering this “fair tax regime” is something that OEUK has engaged in talks with the current UK government, the opposition, and the Scottish Government about.”

Jeremy Hunt just said on R4 that he “profoundly disagrees” with Chris Skidmore’s view and that domestic oil and gas production will create 3xs less emissions than imports and improve energy security.

The Offshore Petroleum Licensing Bill will address the licence offer aspect, but for offered licences to result in actually producing fields will require changes to the oil and gas fiscal regime. When will these changes happen, Jezza?

The General Election looks like taking place in late Autumn. The Tories want to max-out the North Sea. They will pass legislation to require new licenses to be offered each year if the UK is projected to be a net importer of hydrocarbons and the emissions from imports would be greater than domestic production. However, private capital to develop new fields is less likely to be available unless an improved and long-term stable fiscal regime is introduced.

Are the Tories more likely to make oil and gas sector fiscal changes before an election and underline to the electorate what they have done and would continue to do or, alternatively, pledge to make similar changes should they remain in power after an election? Which approach are they likely to think would win them more votes? (And more donations, but vote attraction is by far the dominant deciding factor.) If it is the former, changes before an election, then the Spring Budget in early March would have to contain the measures to improve and stabilise the fiscal regime.

My guess is that few voters will make the connection between the fiscal regime and actual production. Therefore, the Tories will just repeat the message they want to max-out the NS reserves and Labour want to stop new licenses, without making any fiscal changes before the election. Plus, making fiscal changes before an election would leave the Tories open to attacks from Labour that they have watered down or removed the Windfall Tax on the profiteering oil companies, and this would turn-off most voters. Does anyone see a scenario where the Tories think it is in their best interests to make fiscal changes before an election?

A very Happy New Year to all.

Stevo, why do you say the Viaro JV money is ring-fenced to a specific project? From the RNS the cash-advance initial payment is for “general corporate purposes” - see RNS extract below.

“Under the terms of the agreement, total consideration in respect of the Bressay field and FPSO is £46.0 million and will involve an initial payment by RockRose to EnQuest of £34.75 million, which will be used for general corporate purposes, with the remaining £11.25 million to be paid from future Bressay cash flows.”

All the communications position the deal with Viaro as paving the way to progress Bressay but, thankfully, stay well short of implying even a FDP will happen for sure. The deal structure gives Viaro decent protection if Bressay does not progress. It also makes clearer the value of EP. (Hiving off into Veri Energy the green/renewables part of the biz will also help to externalise the value mainly hidden whilst co-mingled with the rest of the business.) Viaro’s Mazzagatti (only 37, and clearly a forceful, determined, and somewhat controversial character - https://medium.com/authority-magazine/francesco-mazzagatti-of-viaro-group-on-how-they-are-breaking-the-cycle-of-non-renewable-30daa307565a) is trying to make Bressay a sort of litmus test for new investment in general in the NS. He, being freer of the encumbrances EnQuest/AB have, can speak his mind equally freer to the politicians, regulators, Unions, etc. He can afford to be politely yet uncomfortably direct and has cleverly put the ball in the court of the UK’s politicians. It would be economic madness to both turn away inward investment and not develop the UK’s own hydrocarbon resources (the UK people and their politicians are fast understanding they cannot afford “9 times cheaper” renewables) as well as create more emissions, impact national security, export jobs blahdy blahdy blah. Viaro may well be fronting for capital-providors who prefer to remain in the background, although the key politicians will be made to who it is and the consequences if they are not listened to and reasonably accommodated. Changes to the EPL or at the very least assurances about the conditions after the EPL will be needed. My hopeful guess is there will be a push, following the recent Fiscal Review, to bring forward a new fiscal regime with an in-built long-term fiscal stability mechanism. Viaro, and others who can decide to invest or not in the UKCS, are in a far stronger position now than the already invested Independents were. I continue to consider significant B&B’s status as fields already licenced by the NSTA. Time will tell whether the plan for Bressay works but what EnQuest and Vario are doing right now comes across as very clever. This, together with the combination of EnQuest’s and Viaro’s resources, direct and indirect, known and unknown to outsiders, should give serious encouragement for EnQuest LTHs.

Profit, mrc, yes, Viaro are buying into the package, 15% of both Bressay and EP together. My point is that at the moment Bressay has only a value if it is developed, this is more likely now but remains far from certain, whereas EP has a certain real today commercial value. By structuring the deal as they have at the very least, sort of worst case scenario, Viaro own 15% of an asset with a real today commercial value. The deal structure gives Viaro protection, and doing the same for future tranches could give similar protection. Is a clever deal structure. I am asking whether £230m could be a reasonable today commercial value for EP? (Leave aside, for now, that EPs value to its current owners to develop Bressay would likely be greater than its today commercial value.)

Mod, yes, Mr Catskiller! I lived a couple of years in Trastevere, in the heart of Rome, and got used to hearing the Romano version of wow, “ammazza”. Mr Mazzagatti sounds a smart and straight-talker, polite but unequivocal, and this IMV is needed. As i wrote before, as he is less encumbered due to Viaro’s existing position (yet with the desire and resources to invest) it is easier for him to tell truth to power and more likely the UK politicians listen to him and act. Ms Cook said similar things but was largely ignored and the result was announced last week. All hail the Catskiller!

Ukbbbbbb, Viaro will have first call options to increase their stake in Bressay/EP. On further reflection, it’s likely the initial £35m from Viaro is almost all “for” EP. Viaro by linking their investment also to EP have some protection should events conspire such that Bressay is not developed i.e. they would still have 15% of a sellable asset, EP. Is £230m the sort of commercial value EP could have?The 15% investment now, with £35m upfront, shows commitment and allows checking the regulatory situation.

From August 23, but still worth reading this too: https://energycouncil.com/articles/executive-interview-francesco-mazzagatti-viaro-energy-north-sea-focus/

Mr Mazzagatti appears an impressive and eloquent individual. He also appears to be more straight-talking than political with his words. It seems he has the power to make decisions to invest or not and is in a strong position in that he has the desire and means to be invest in the UKCS but not an entrenched position or obligation to invest. PMs and Treasurers, existing and likely, will listen to him than those they considered having over a barrel.