Member Info for Dumbly

Stumpy, one, agreed, and is the same logic I used a while back to argue that for Equinor to make a positive FID on Rosebank would require an amendment to the EPL but as time has passed I've become more pessimistic. It's something, amending EPL or not, which can be argued either way. Once Rosebank is on GS's desk, and therefore also on JH's, it should be decision time. on the EPL as feels unlikely Equinor would proceed at the current fiscal conditions.

Graham Stuart, minister for climate and net zero, said the Government is committed to new oil and gas licences in the North Sea but would not say when a decision on Rosebank is likely to be made.

“We firmly believe that producing our own oil and gas as net importers, and will continue to be even as demand drops, is the right thing to do”.

“Otherwise we’ll be spending tens of billions, if not more, on foreign-produced fossil fuels, often with lower standards of production than will happen at home.

“We would never license oil and gas development in the UK that wasn’t compatible with net zero and 1.5C.”

Published yesterday:

https://www.cityam.com/uk-committed-to-new-oil-and-gas-licences-but-would-never-back-plans-which-fail-net-zero/

Sekforde, FYI below a post yesterday on the GKP LSE Board from Itsaponzi to TerryMC1:

Terry MC1 are you invested in every share going you post 20 negative posts a day on 20 different companies on lse !!

So your opinion counts for nothing ...

You must be one very sad f&&k

Sekforde, beers on me all-round if I am wrong. I want to buy beers :)

Your comments on a Harbour/EnQuest merger makes a lot of sense. Could it that AB values keeping his independence and LC does not want to be seen contradict her words plus does not want to further expose the company to the UK in volume and duration? The big value, as you say, is in an accelerated use of EnQuest's tax losses, but there should also be synergy benefits. IF equitable terms could be agreed why would the majority of shareholders on both sides not agree?

Sekforde, I, of course, want you to be right, but concerning the EPL I have arrived at a reluctant acceptance it is here to stay. Too politically charged an issue and, as said before, it suits the Cons to let Labour inherit this mess. And Labour’s policy is to have an even bigger mess. Even if there was a floor put in place it would likely be too low to significantly help EnQuest. At this particular moment in time energy supply and security, coupled with economic security, should be treated as a matter of National Security and therefore, as far as possible, above party politics. The politicians also have independent bodies they can refer to for support and cover, as needed, for the decisions they should make. My guess is the majority of the public would support a modified fiscal and energy policy if supported by the two main parties and things were explained properly. But… with the current bunch can you see them even in this critical area at this critical time acting above their personal ambitions and in the national interest?

Battle, my worry starts to be that the penny has dropped in Westminster, in the Government, and that the Tory party have accepted they will lose the next election by a landslide and have therefore opted to play a long game by making the economic environment Labour inherit as bad as possible.

Reading again this article https://www.theguardian.com/business/2023/may/01/does-the-uk-really-need-to-drill-for-more-north-sea-oil-and-gas which, as said before has some good parts but fizzles out in the end with a lazy conclusion (those revenues have already been used/earmarked for use elsewhere and with current fiscal policy will diminish fast while net hydrocarbons imports will increase and UK GDP and related jobs drop). It strikes me as a massive cop-out the statement from the CCC chair: “In a letter to the business secretary last year, Lord Deben, the CCC chair, said the committee had not been able to establish the net impact on global emissions of new North Sea oil and gas projects. The UK will continue to be a net importer of fossil fuels “for the foreseeable future”, he added, meaning there could be an advantage to domestic oil and gas over imports, which often have a bigger carbon footprint.”

If the CCC with all the resources they can call on, including help from The Office for Budget Responsibility, can’t tell us even with some range of accuracy “the net impact on global emissions of new North Sea oil and gas projects”, then who on earth can?

By then adding the wishy-washy “Still, ministers should be using policies that drive down demand for fossil fuels to keep a lid on imports, and applying “stringent” tests on new domestic production with “a presumption against exploration”, he is saying we don’t know what is best in terms of less emissions, but let’s put up plenty of barriers on new UK production and stop exploration. Surely, it should be the other way round; as we will need oil and gas and this requirement is not impacted by where it comes from, and as our best estimate is new UK production would cause less emissions, let’s produce as much domestically of our requirement as economically beneficial to the country.

The CCCs “purpose is to advise the UK and devolved governments on emissions targets and to report to Parliament on progress made in reducing greenhouse gas emissions and preparing for and adapting to the impacts of climate change”, so they could argue it’s not their role to say whether one policy or another is better for emissions, but I’d view that as a cop out too. I get they want to see emissions reduced but either way, more UK production or more imports, the emissions will be there. The CCC is supposed to be politically independent and should not sit on the fence like this. They will probably also argue they don’t want to be seen to be giving the wrong message to other countries. I will waste another hour or so and write to them about this.

The UK government has put conditions in place which result in an economically illiterate situation. This is the same as having an economically illiterate policy, something the Cons accuse others of having. Probably the Cons have decided changing the windfall tax would not be a net vote winner and would economically advantage a likely future Labour government. Politics being played, and the net loser is the British public.

Thinking again about the recent exchange in PMQs between Caroline Lucas and Rishi Sunak, the PM said “it makes absolutely no sense to not invest in the (fossil fuel) resources we have at home…”. The domestic producers through their words and their actions have shown they will not actively invest in new projects. How to square the circle between this policy of wanting investment in domestic fossil fuel resources and position of the UK-based producers? Either the producers change their position, which seems highly unlikely, or the fiscal conditions (EPL) have to be modified. A FID on Rosebank must be imminent.

On 4th May 2023 Equinor’s CFO said about Rosebank: “Despite the UK's "energy profits levy" -- which raised headline taxes on oil and gas revenues to 75% -- Reitan [Equinor’s CFO] highlighted investment allowances, worth 29% under the EPL, that can be carried over to other assets such as Mariner, a $7.7 billion project Equinor brought on stream in 2019.” UK Rosebank project 'very important' for energy security, industry: Equinor CFO | S&P Global Commodity Insights (spglobal.com)

My thinking before was that the FID would act as the catalyst for a change to the EPL. However, could no change to the EPL (causing most UK-based companies to maintain their current position of no new investment) and Rosebank going ahead, combined with Equinor’s exports from Norway to the UK, conceivably create a competitive advantage overall for Equinor?

Whichever way I look at it, if the government wants to get most companies “to invest in the (fossil fuel) resources we have at home” the EPL has to change. And very soon. And in a way which would survive a change of government (is it possible to do this?).

Tommo, another good article covering Sunak’s answer to CL’s question yesterday as romaron already posted about. https://www.cityam.com/sunak-backs-uk-oil-and-gas-sector-in-grilling-over-rosebank-oilfield/

Surely something has to give with the mismatch between the Conservative’s mood music and fiscal policy with regards to the NS. Shapps a couple of weeks ago said Rosebank had not reached his desk yet. A nice passing of the buck to the regulators as the decision will not reach his desk without a change in fiscal policy: https://www.cityam.com/shapps-we-want-and-need-oil-and-gas-sector-to-reach-net-zero-and-protect-uks-energy-security/

Romaron, thanks for posting Https://www.youtube.com/watch?v=Hwd0JQjOi8I It is an excellent interview. I agree with your comments about Ross Clark. He certainly knows his stuff and is able to explain himself well supported by facts and in, what I found, an entertaining way (OK, he’s no Boris, but that’s absolutely not what’s needed here). He also comes across as a person who would not easily get flustered, which is important should he be put in a debate with some of the ER/JST types. He also sounded fairly apolitical. Of course, the message he's giving is akin with pushing the proverbial uphill as far as many people are concerned but, who knows, maybe he could be that type of alternative figure the British public could warm too. If he can get some proper media time that is so be could have a chance to breakthrough. As others have pointed out, at some point the economics will determine the agenda and actions. But when will this happen, what could be the catalyst?

Aim, donations to political parties are probably made by AB in his name rather than from EnQuest. Good idea for the petition.

Romaron, where can I find the graphic of Rishi in a white sweatshirt with the Shell Logo and a misspelling underneath it of "Shill" and who "published" it?

GordonAlbert, the article you posted at 13:09 is fairly good, except… in its conclusion, by saying “…meaning it could be the perfect time for North Sea oil revenues to be put to work helping to reduce Britain’s need for new North Sea projects in the future.” Does the author mean the tax receipts from these revenues or the actual revenues? If she means revenues and tax receipts are the same thing, then clearly it does not work, as who will invest with such a fiscal regime (or even the current) one. If she means the activities generating NS oil and gas revenues will also provide the oil and gas for the transition as well as the skills etc, then it could be a good conclusion. It comes across like she cannot make the jump to actually write more NS oil production is what is needed for the UK now and for… the next 10-15 or so years.

From the following the CCC, albeit in a somewhat circuitous way, seems to be saying oil and gas will be needed and domestic oil and gas production is preferable over imports: “In a letter to the business secretary last year, Lord Deben, the CCC chair, said the committee had not been able to establish the net impact on global emissions of new North Sea oil and gas projects. The UK will continue to be a net importer of fossil fuels “for the foreseeable future”, he added, meaning there could be an advantage to domestic oil and gas over imports, which often have a bigger carbon footprint.”

Almost all seem to be *****-footing round the absolutely obvious.

Could the CCC together with the OBR be the best honest (hopefully) brokers to come to a conclusion all could and should live with? The recent energy debate in Parliament, of course tinged by political allegiance, appeared to be objective and as independent as such a thing could be. The debate’s conclusion that all should be done to reduce oil and gas use but that oil and gas will be needed for the foreseeable to support the transition and the more of this which comes from “indigenous” sources the better for the UK and less damaging for the climate. It feels like another independent body, able to say the inconvenient truth of the situation is missing, and to whom all could point to to avoid the fallout flak from advocating more UK oil and gas is needed in the interim. Something like the Department for Energy Security & Net Zero, but independent as the CCC and the OBR. The issue is just so fundamental/important to be a political football between the parties. The UK political class in the way the issue is being mis-managed now are doing a great disservice to the British population. (I see parallels with… Brexit.) The UK political class should look at how Norway have managed for the benefit of their citizens the great asset they were so fortunate to have – OK, many differences between the two countries, and it is too late for the UK to emulate the Norway model, but it is still not too late for the UK not to throw away the geological advantage it has.

Modestus, I am with you and have the same hope. The problem, tho, is the people who made those comments would likely vote Tory whatever, therefore they are somewhat taken for granted. What the party is interested more in is positively influencing those people who could vote for almost any party, or put the other way, to not alienate those people. Let's keep an eye, as TimTimeBomb suggests, on the progress of the Finance Bill.

Thanks, mrc.

An extract from the article:
A survey, commissioned by OEUK and carried out by YouGov, found that nearly three-quarters of MPs believe the UK’s net zero goals can only be achieved through collaboration with the oil and gas sector.

The research commissioned by trade body Offshore Energies UK (OEUK) found that 73% of parliament members held the belief while 45% of politicians surveyed said the UK has the people and skills needed to deliver cleaner energy sources through the development of technologies including wind, solar, hydrogen, and carbon capture. [Dumbly: so 55% of MPs... don’t think the UK has the required skills.]

Professor Nick Schofield from the University of Aberdeen’s Department of Geology and Geophysics commented: “It is acknowledged that oil and gas will play a major role in the energy mix of the UK and globally to 2050 and beyond, forming an essential part of a sustainable and just transition.

“However, this message is uncomfortable for many to reconcile.”

The MPs questioned did voice concern regarding the future of the energy section however, 55% of respondents said that the declining number of applications for energy-related higher education courses is a concern, with 18-24-year-olds making up 12% of the total workforce.

Prof. Schofield added: “The nuances in skillsets within the energy industry are often not understood well by government, politicians, or environmental groups.

“For example, the same geoscientists and engineers which are working hard in industry to ensure the UK’s indigenous supply of oil and gas and future energy security, are the very same who are applying their skills to getting the UK’s first CCUS projects off the ground. They are also the same people that are needed for hydrogen and gas storage.

“However, the increased negativity shown towards those areas of the energy industry associated with oil and gas is already starting to lead to a skills crisis in the UK. “It is becoming harder to show young people that the energy industry is a viable and fulfilling future career.”

AIMOiliking, yes. great article. Thank you, Modestus, you're a poster of few words but excellent finds.

Maybe related, regarding sending the article to MPs - I saw this article headline on Energy Voice but rest is behind a paywall. I tried to find the survey elsewhere but was unsuccessful. Maybe ithers can access the full article and comment?
"Most MPs believe collaboration with oil and gas is needed for energy transition
A survey, commissioned by OEUK and carried out by YouGov, found that nearly three-quarters of MPs believe the UK’s net zero goals can only be achieved through collaboration with the oil and gas sector."

Terje Aasland (see my post 14:38 yesterday) is a Labour politician https://en.wikipedia.org/wiki/Terje_Aasland.
Assuming Labour in Norway is ideologically similar to Labour in the UK, then maybe Terje should have a word in the shell-like of this bros in the UK.
You could not make this up - that the UK is effectively considering to outsource the production of their hydrocarbon needs to Norway (and others).

The article Modestus posted and which I am referring to with regards to Norway:
https://www.bloomberg.com/news/articles/2023-04-26/barents-oil-explorers-to-leave-no-stone-unturned-norway-energy-minister-says?srnd=premium-europe&leadSource=uverify%20wall

"Oil and gas companies, such as Equinor ASA and Var Energi ASA, should “leave no stone unturned” in expanding their resources in the Barents Sea region as Norway looks to future-proof its position as key energy supplier to Europe."

"“The Barents Sea is like a kind of little brother, but when we look into the future at the resource potential that is out there, it could be a big brother on the Norwegian continental shelf in the future,” Petroleum and Energy Minister Terje Aasland said in Hammerfest Wednesday. The industry has collective responsibility, and “that means leaving no stone unturned to find more gas in the Barents and that work on expanding export capacity continues.”"

Thank you, TTb, nice, fast, and comprehensive reply.