Member Info for Dumbly

I have also friends, reasonable, sensible people, millenials and older, who say the oil giants must pay more tax on their massive profits. They assume it would come to the UK and just don’t realise most of these profits are outside HMRC’s grasp. They know little of the make-up of the companies operating on the UKCS or the cyclical and long-cycle nature of the industry. Why would they? The media paints the picture which gets most attention. They, the friends, don’t seem to understand how the tax system works. They just hear the headlines and they are looking for someone to grab and blame for their difficulties. It is easy to unite people against these massive multinationals making billions and polluting. Leave aside we all have the life we have in good part because of oil. Often people end up hating those who help them.

Anyway… VOTE FOR ME PLEASE! With regards to energy I pledge to follow policies leading to selecting options which best:

- Grows the economy and UK-based jobs which will increase tax income and support the government in reducing inflation and interest rates to address the cost of living

- Decarbonise more compared with other options (except those which would put the UK on the path to a post WWII standard of living)

- Delivers both general and energy security for the nation

- Supports an achievable energy transition plan through the availability of capital and the right skills

- Does not involve telling the public fairy tales or selling them unicorns

And... the only course of action to deliver on this pledge and all these things is a set of policies TO INCREASE OIL AND GAS PRODUCTION FROM OUR OWN TREASURES WE ARE LUCKY TO HAVE IN THE NORTH SEA.

Great article, romaron.

How to get Joe Public to know this? And will “energy” be one of the key issues at the next GE?

Could it be as a part of his compensation arrangement so an obligatory transaction?

Nice find, romaron, the paper explains the situation well.

Starmer has invested so much political capital in the no new licences policy that without something major new happening I don't see how he can justify throwing a u-turn on it. Having said that, the ability of some politicians to swivel on a sixpence can be almost a thing of beauty.

Redbuffet, if Enquest was a "screaming buy at 14.5p and a moderate buy at 15p", what does 16p make it?

Agreed. Pyueck. Until a long-term acceptable and stable tax regime is known it seems unlikely these "offered" licences, or other major field extensions such as at B&B, will actually result in major new investment/production. Without a new tax regime the government's actions are more for show and votes than anything concrete in terms of investment/production.

Kracken, Linda Cook had already said they had not made any applications. AB, as far as I know, had not said similar. To note, other licences in the 33rd round could still be awarded.

No involvement from Enquest as Licence Administrator or Partner: https://www.nstauthority.co.uk/media/oiuft2xx/33rd-licensing-round-tranche-1-potential-awards-by-administraitor.pdf

Https://www.nstauthority.co.uk/news-publications/27-licences-offered-in-first-batch-of-33rd-oil-and-gas-licensing-round/

To be more accurate TK position is not that gas will not be needed by the UK but that new UKCS licences and exploration will not result in “much” new gas. Then… why should she worry? This exploration would be done with private capital which, according to her “pipe-dream” argument, would be wasted. And if this was the case she should not worry as the lack of gas would deter further investment. Continuing with this argument she will disappear up her own behind.

Tessa Khan, executive director of Uplift, said: “Over the past 13 years under this government, new licences – hundreds of them – have led to a couple of months’ worth of new gas being discovered, and only just over a fortnight’s worth actually being produced.“

“The Conservatives are selling us a pipe dream when they need to be straight with people about how we’re going to power this country. Rather than coming up with a coherent plan for ensuring we have a secure and, crucially, affordable power supply, they’re trying to score political points.”

Aim, yes, logically it should be a co-ordinated double act between the King’s speech and Hunty’s Autumn statement. As said, I hope there is soon a change to the EPL, but it’s highly unlikely as Sunak’s priority here is positioning and posturing towards the electorate and not actually getting more investment in the NS before the next GE.

The “16 days” claim may be supported by some sneaky statistical manipulation but sounds like horse manure. An interesting change of tact tho from Uplift/TK towards discrediting the economic sense of new UKCS drilling, which should be easily challenged and batted away.

This speech should be an issue interesting listen for us.

https://www.theguardian.com/politics/2023/oct/28/rishi-sunak-to-double-down-on-anti-green-policies-in-kings-speech?CMP=share_btn_link

“Rishi Sunak’s government will use next week’s king’s speech to advance expansion of North Sea oil and gas exploration, as well as pro-car policies, in the hope of opening up a clear divide over the green agenda with Labour, the Observer understands.

Energy industry sources and senior figures in Whitehall say they expect ministers to announce legislation to usher in a new annual system for awarding oil and gas licences, despite the UK’s commitments to move away from fossil fuels and reach net zero carbon emissions by 2050.

The king’s speech, the final legislative programme before the next general election…”

Stevo, thanks for all your helpful work about Malaysia. I questioned your conclusion when you first put it out, but from the information you’ve provided, and that’s the way to do it, your original conclusion is clearly sound. Would still be good to get a comment from IR just in case something missed.

Tigar, the government went out of their way to highlight the EPL is a levy not a tax, probably in good part to avoid the type of challenges you suggest. Crafty, nay shifty, characters they are.

Another glimmer of hope for the industry comes from the “Review of the oil and gas fiscal regime” which following the Call for Evidence which closed in September will “report by the end of this year” Does “report” mean their final report with recommendations or just an update report?

The Terms of Reference https://www.gov.uk/government/publications/review-of-the-oil-and-gas-fiscal-regime-terms-of-reference/review-of-the-oil-and-gas-fiscal-regime-terms-of-reference look like they have been developed without a particular political or ideological basis. It’s the sort of thing that could have been produced by a cross-party committee of “sensibles” thinking in the general best interests of the country whilst considering wider responsibilities and obligations. “The review will be led by HM Treasury, working closely with HM Revenue & Customs, the Department for Energy Security & Net Zero and the North Sea Transition Authority”. I wonder whether the Office for Budget responsibility and the Climate Change Committee, as directly interested independent parties, will be invited to comment on the review’s output? Their “approval” would carry a lot of weight.

My hope is that the report and associated recommendations will be something either major party can buy in to and support. Starmer could still, for as long as he wants/can, maintain the position of issuing no new licences, but at least the open/awarded licences would have a better chance of progressing in the interests of all stakeholders, private and public, local and international.

Thoughts?

Aim, I so wanna be wrong, but I just can’t see Sunak being bold and relaxing the EPL. What’s the political/vote-gaining benefit for the Tories? They have already set out their policy stall, being to continue to issue licenses to Max-out the NS, and thereby differentiating themselves from Labour in a clear way for the public to understand but without getting into the dirty details of how to achieve this. Touching this populist windfall tax, something essential to achieve their stated aim, is just not important for them as it would be too easy to use this to highlight their support for oil giants profits etc. It's too complicated to get the full picture and message out to the public, and for no gain but sure losses. Hunt would kick up a stink too. Politics! And the Tories say they don't want to play politics with the UK's energy security. Plus, there is insufficient time for any real economic benefit to result, and anyway companies would not change their investment plans before knowing the outcome of the next GE and the new government’s position. The sooner this GE takes place the better. Maybe Starmer could then throw some sort of u-turn, at least with regards to the fiscal regime to at least encourage investment in the licences already awarded. I am sure he could find some way to justify that. This seems the industry's best hope.

Regarding the Chancellor, if it was confirmed he was going to stand down he would almost certainly have to resign as Chancellor. His spokesperson has quashed rumours he will resign, altho not sure the value this statement as evidence has shown he's a... lying Hunt.

Kathryn Porter is “media-skilled” - see https://youtu.be/7OKF_zVcUV0?si=yV8FRz8cwkEYmL8W

Note this interview is from a year ago.

Aim, I don’t know if Kathryn Porter has media-skills etc, but it is people with her knowledge and fact-based and pragmatic approach I would like to see more of on the TV and in print/online. At the opposite end of the spectrum, Tessa Khan takes an ideology-based approach and lies and manipulates the uninformed, and they in doing so plays into the hands of Putin and co. She needs to be investigated, including the sources of her funding.

Enjoy!

https://watt-logic.com/2023/10/20/north-sea-oil-and-gas/

I’d love to see a debate between Kathryn Porter and Tessa Khan.

Environmental campaign group Greenpeace has vowed to appeal after it lost a legal challenge against a new major UK oil and gas licensing round: https://www.energyvoice.com/oilandgas/north-sea/exploration-production/539463/greenpeace-vows-to-appeal-after-losing-court-challenge-to-new-north-sea-oil-and-gas-licenses/

Assuming I can find her contact details (does anyone have her email?), I’ll send Ms Khan a note asking her help in understanding how “There is no public benefit from new licensing, only more profit for oil and gas companies.” I will include the question "what do you understand the term 'energy security' to mean?" Her argument in this regard is that government claims that new North Sea exploration would increase energy secretary are false. She said “Most of what’s left in the basin is oil, most of which we export,”. I don’t have certain numbers on percentage of oil which is, and likely will be, exported, but my understanding is that it is exported for two main reasons; the type of oil is best used elsewhere and the UK does not have the refining capacity. Most of the oil exported due to refining capability is sent to nearby and friendly NL and the UK could easily make an agreement making export contingent on a corresponding amount once refined being returned to the UK. And, if it became a situation absolutely of “needs must” I imagine the UK’s refining capacity could be relatively quickly increased and expanded even to handle the type of oil currently exported as best used elsewhere. If anyone understands better this aspect, then please give me the info.

Even the argument that extra UK production does “nothing to help lower energy bills” does not hold water. Increased production increases GDP and, presumably, tax revenue. This resulting extra money in the Treasury’s purse would not be there without the extra production, and this money benefits the UK public. I’m not saying they should, but the government could take that extra money and use it to subsidise energy bills (something. if not directly, they more or less did with the EPL).

All of this assuming the UK will need oil and gas for decades to come, more or less in the amounts projected and accepted by reliable and credible bodies, but I think the discussion on whether these assumptions are solid or not is long over.

On a side point, and not sure what conclusion, if any, to reach, of the core-team and steering group of 28 people shown on Uplift’s website, 20 or 71% are women.