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Saint Harriet versus the rest of the world and their tired and misplaced arguments.

"On 19 March, MPs held a debate entitled 'Progress in tackling climate change'. This was a Backbench Business debate led by Luke Murphy MP. Minister for Climate Katie White MP responded on behalf of the Government."

Harriet was very much on own against the normal suspects. The issue is straightforward; if the UK will be using oil and gas, and it will be, then emissions would be lower the more oil and gas the UK produces. This, even if oil is exported to be refined elsewhere. Then there are the other benefits of jobs and revenue for the Treasury.

Harriet can be seen in action from 15:08:30 https://parliamentlive.tv/event/index/ee3367ce-727d-4337-9915-2333adafa143?in=14:19:33

Thanks, Profit, you’re right Kraken oil is Heavy Sweetish, and I agree with your other comments.

Kraken is… Heavy Sour.

https://ddgeopolitics.substack.com/p/the-new-oil-order

A little long but very good.

https://x.com/edconwaysky/status/2034207156140974320?s=46&t=3icqiBhgmGSnUo8L1GVnng

Good post, Mod. Many seem to, slowly, reluctantly, but surely, coming around to a similar conclusion.

(In his article he states "Brent oil futures contracts for 2028 are just over $70, roughly the average for the last half-century in real terms." My (CHATGBT-assisted) calculations put average real terms 50 year average in the range $85-105)

Hunbah, when you wrote "On oil price, I would probably just add that the market is trying to decide whether this is a spike or a regime shift. If it is a spike, equities lag. If it becomes a regime, cash flow starts to get capitalised quite quickly." by regime shift, you were referring to a shift in the regime of the oil price not regime change in Iran?

Profit, ron. Hun, thanks for hedging comments. Noted that we don’t know precise volumes, or strike price or expiry dates, but grosso modo my thinking is: 4mmbbls is approximately 3 months production, Brent was below $70 for almost all of Jan and Feb, so the “loss” over spot Brent because of hedging could be minimal, especially if Kraken oil is being sold at a premium. Is this reasoning valid or is it far far more complicated than this – for example, to get the hedged price do contacts have to be closed at the time, or can they be closed at any time before the expiry date?

Separately, the cycle-adjusted (removing excessive price spikes) average price of Brent over last 20 years adjusted for UK CPI inflation is in the range $95-110, meaning the current price is historically more like the average than high. The OGPM 2026 oil threshold of $90 reflects this. It’s more a case that lower than average prices have become sort of the accepted norm. This needs to be highlighted when increasing windfall taxes is raised (which, anyway, will hardly touch the majors, and towards whom the ire is often focussed).

On hedges, I understand they are financial instruments with a determined time duration and are not linked to any actual/specific sales transaction. Is there a choice when they can be used “used” in a way to get best advantage? "Educate" me pls, someone, simple and easy pls, on this aspect.

More like Major Kong https://youtu.be/P65VAZ6ntQw?si=koRjPzVoe5Tv6w6o

I caught the end of Starmer’s speech today. Asked whether the windfall tax would be extended to ensure the oil companies pay their share, he said Labour had extended it in 2022 and it was right them and the reason then was the same now. He said oil and gas would be needed for decades which is why they are working with the oil companies about tiebacks. I may have some detail wrong, but this was the general message and it sounded like a confused and contradictory one. The fuel retailers and the oil producers are not the same thing, The windfall tax as-is and tiebacks are not complementary - without a change to the windfall tax the producers won’t significantly invest. And if tiebacks are so significant/important, for the same objective why not allow new licences? The government wants more investment and more taxable revenue, something which won’t happen with the EPL. The only way out of this is to implement the OGPM fiscal regime designed exactly for this purpose/objective of increasing production and, longer-term, tax take.

LBC putting Miliband on the spot:

https://x.com/daveatherton20/status/2033240970536390955?s=46&t=3icqiBhgmGSnUo8L1GVnng

L7, the point is more NS production WILL take money off people's energy bills whilst Miliband continues to repeat this is not the case.

“Speaking to CNBC's "Squawk Box Europe" on Friday, Amjad Bseisu, CEO of British petroleum production company EnQuest, said the oil market has "never seen something of this magnitude before."

"Every day we see a delay, there's another 20 million barrels [wiped off the market], and that will have an impact, and continues to have an impact," he said.

"I think this will be probably longer and harder as a crisis than before, and probably something we need to just watch out for the downsides rather than the upsides."

Bseisu noted that the last time there was a similar reduction in global oil supply was the Arab embargo of the 1970s.

"Then we saw quadrupling of prices, and I think we've seen prices here come up 50% but I do think this is going to be quite a long run," he told CNBC.”

https://www.cnbc.com/amp/2026/03/13/oil-100-price-brent-wti-trump-iran-war-surrender-khamenei.html

“Chancellor Rachel Reeves is to offer a package of support to households struggling with higher heating oil costs following the global impact of the US-Israel war in Iran.

In an interview with the Times, Reeves said she has "found the money" to help, adding the Treasury is also looking at "different options" to help those most vulnerable to soaring energy bills.”

https://www.bbc.com/news/articles/cvg3y9dpvxgo

Reeves needs to explain to Miliband that this money was not “found” under the sofa or on the magic money tree, and that its effect is to lower energy bills. It comes from taxation, part of which comes from oil and gas production and longer-term this tax would be more with the OGPM in place sooner than 2030. As nice side-effects it would also give people jobs, reduce global emissions and improve the UK’s energy security.

Miliband will meet with the petrol retailers but not the oil and gas producers???

Pure egoistical ideology. How long can one man, and his supposed boss, resist the “wisdom of the crowd”? I suppose until Starmer puts country before himself.

Miliband avoids discussing energy security and sticks to the line that more oil and gas production won’t take a penny of energy bills. This is flawed and needs to be countered. If people are given support for energy bills and renewables subsidies, where does the money come from? Increased oil and gas production would result in more tax revenue and this goes towards paying for the energy bill support and subsidies so it does reduce people’s energy bills.

What’s today’s date? Half past five.

https://x.com/harrietcross_mp/status/2031447852178608170?s=48&t=3icqiBhgmGSnUo8L1GVnng

Kraken, what did Reeves state yesterday?

Nobody commented about Tullow and the UK's EPL/Windfall tax. Am I correct to understand that as all production is outside the UK that the EPL/Windfall does not apply, that it is irrelevant for Tullow? TIA.

OGPM not OPMG.

"While the ambition is to implement a transaction-based OGPM to effectively target windfalls, the government acknowledges practical challenges in tracking hedging outcomes and will work with industry to identify a level of transaction data that balances administrative feasibility with policy integrity."

https://www.gov.uk/government/consultations/oil-and-gas-price-mechanism-consultation/outcome/oil-and-gas-price-mechanism-consultation-summary-of-responses

Frac, interesting idea if 90/90 reached then they could use this as an explanation/justification for switching to the OPMG. I need to read the OPMG stuff again, but I recall the windfall part is on revenue above 90/90 but also takes account of hedging positions. Sounds complicated, and I wonder whether The Treasury has the exact mechanisms already in place. My guess is they parked the hedging aspect until they were sure the OPMG would go live, and as it is/was scheduled for 2030 maybe they thought to leave that for other colleagues to work on later.