Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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.
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.
Looking at that link, romaron, made me think I agree that oil and gas should rightly be described as Hydrocarbons not Fossil Fuels.
According to the British Geological Survey “ Fossils are the preserved remains of plants and animals whose bodies were buried in sediments, such as sand and mud, under ancient seas, lakes and rivers. Fossils also include any preserved trace of life that is typically more than 10 000 years old.”
That’s a powerful statement/election manifesto from OEUK: https://www.energyvoice.com/oilandgas/north-sea/548551/oeuk-general-election-manifesto/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%20Voice%20Daily%20Newsletter%20B%202024-02-26&utm_term=Energy%20Voice%20-%20Newsletter%20%28B%20Test%29
Is it delusional to think an improvement in the fiscal regime could be contained in the Spring Budget? Raise the stakes, go on the offensive and highlight the differences.
Yes, it is a global market so local production won’t directly reduce local prices. However, local production will… well, you know the rest.
And, if only very low or non profitable production is possible, soon there will be… no tax to collect.
Krak, I could not see an updated tax losses amount in last week’s update. Is it there and I just can’t find it?
Anyway, Schlem, the tax losses are around $2.6B, and the company needs to find a way soonest to use them.