RE: One step forward...18 Dec 2024 07:01
Cont’
US-based Apache last month announced plans to wind up its North Sea operations by 2029, blaming the UK tax regime. Shell and Equinor have merged several of their UK assets into a new company to be more tax-efficient.
“Every oil and gas producer in the UK will be looking at opportunities outside the UK right now,” said Gilvary, whose company has negotiated a deal to buy a share of a Gulf of Mexico deepwater field operated by Shell from China’s Cnooc International for an undisclosed sum.
The frustration for those players in the North Sea in the UK is we’ve sort of got our hands tied behind our backs because [we cannot get] new licences. So we cannot extend the life of what we have, even at these punitive tax rates. And so you end up in a run-off position.”
“Basically we’ll try to harvest the assets as best we can and focus elsewhere,” he said.
Gilvary said the government did not “appear to wish to engage” on the North Sea’s fiscal regime, although he expected that the taxes would eventually be cut, but that companies may be unwilling when that time comes.
The market value of the UK’s top 25 independent oil and gas companies has fallen from £27.8bn in 2011, when oil prices averaged $110 a barrel, to £9.8bn at the end of last year, when oil prices averaged $80 a barrel, according to Deloitte, as the sector steadily lost its appeal to UK investors.
Kosmos Energy, a New York-listed independent oil explorer, this week said it would not proceed with a proposed deal to buy Tullow, the West Africa-focused UK producer. Tullow, which was worth as much as £14.5bn in 2012, is currently worth £342mn, with a net debt of $1.7bn.
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