Member Info for Harmonica

PlatoComesAgain,

Russia will end up selling its oil to India and China because those will be its two main customers, as its former customers are or will boycott its oil due to the conflict in Ukraine.

PlatoComesAgain,

A country sells its natural resources to whomsoever offers the best price. The seller does not care, nor should care, about the economic activity of the buyer.

Skwizz,

Abramovich did NOT say that it should go to the Ukraine alone. He said that it should go to those affected adversely by the war/special operation, which could mean, of course, Russia. He was careful not to pick sides.

Chandley,

If BP paid £250m voluntarily, the lunatic Left would question it and say that a lot more could have been paid if made compulsory! It would be frankly naive to believe otherwise.

Anyway, this Government under Johnson will not be doing such a thing.

Tamano,

No, the risk is that those who want a windfall tax, but are not paying it, would say that £250m is too little and would set up a precedent that would come and bite BP in the backside later, at the next set of bumper figures.

I am totally relaxed, as it is more than clear that THIS Government will not be imposing any windfall taxes at all.

Front page headline:

"Hopes for a windfall tax blocked by No. 10 team".

The House of Commons has said no and now Number 10.

No chance of a windfall tax anytime soon!

Will the BP share price bounce up now (with Shell, Centrica et al)?

https://metro.co.uk/2022/05/17/cost-of-living-tories-vote-down-windfall-tax-that-could-save-you-600-a-year-16662211/?ito=article.tablet.share.top.link

MPs in the Commons vote 310 to 248 to REJECT the idea of a windfall tax!

PTL!

Meoryou,

BP and Shell will not keep making these great operational profits forever! OPEC may eventually increase quotas or world demand may fall due to lower economic growth.

Moniman,

The last possible date for the next General Election will be December 2024, two and a half years away, not two.

Enso,

Whilst at the operating level there were good profits, as good as they were, they were swamped by the loss reported by the Rosneft investment write-off.

Exploration,

Your argument might have some weight were it not for the fact that there is no symmetry of treatment!

You are suggesting that when the oil and gas contractors have extraordinary luck, they should pay windfall taxes to the owners of the commodity! I see no reason whatsoever why that should be the case, but let us run with that insanity. The problem is that when they have extraordinary bad luck, like a pandemic cutting demand, or incidents like Deep Water Horizon or international sanctions meaning that a company like BP cannot take dividends and is forced to write off 100% of its Russian investments, I do not see the commodity owners rushing in to help out, seeing it as normal business risk. How convenient that the commodity owners can only benefit from upsides but does not share in any downsides!

There is therefore no moral case or business case from a windfall tax.

Exploration,

Your argument might have some weight were it not for the fact that there is no symmetry of treatment!

You are suggesting that when the oil and gas contractors have extraordinary luck, they should pay windfall taxes to the owners of the commodity! I see no reason whatsoever why that should be the case, but let us run with that insanity. The problem is that when they have extraordinary bad luck, like a pandemic cutting demand, or incidents like Deep Water Horizon or international sanctions meaning that a company like BP cannot

Moniman,

The trouble is that it would likely not be a "one-off" as it would set a terrible precedent for the future.

Should the Conservative Government impose such a tax, it would stand accused of abandoning any free market principles that it may still have left.

Gary59,

I really cannot see a Conservative Government imposing a windfall tax, so long as the individual oil companies keep investing in projects to secure energy supplies for the UK and makes moves towards greening energy production for the future.

"Now Rishi warms to energy windfall tax plan".

Getting Civil Servants to look at the numbers for a possible windfall tax dies NOT make it inevitable! It could well be a ruse to be able to come up with a detailed response the next time opposition politicians start piping up in the subject.

The PM has said no already.

meoryou,

Yes, it makes little sense to pay off all debts if fixed at very low levels.

I need to look at the balance sheet, but I suspect that BP could easily keep making repayments for at least a couple of years. The good news is that as debts are paid off , interest payable falls, taking the strain off the cashflow and helping to boost profits.

If the only people calling for it are opposition party members, then I am not worried. The next General Election is way off.

meoryou,

Why invest more? To use spare cash flows to invest in future streams of income! If BP does not invest when it has plenty of excess cash, then when will it?

Yes, BP already pays an enhanced level of Corporation Tax, so there is no need for a windfall tax being imposed and definitely no need to make voluntary excess payments to the UK Treasury/HMRC.

meoryou,

BP can reduce debts for years yet, it has that much.

It can continue share buybacks, even increasing them.

But, even without any of the above, BP could increase capital expenditure in new projects e.g. wind farms on land and in the Irish Sea or North Sea, hydrogen production, greater numbers of electric charging points for cars, or dare I say, even new oil fields since BP has lost loads of Rosneft reserves.

There is always need for capital funds for investment, even before thinking about increases in dividends, which will come...I hope!

As for a windfall tax, under a Johnson Government, it will not happen. Why should BP set a terrible precedent by making a voluntary donation to the state? Madness! People would say that if BP can offer to volunteer it, then it is not being taxed highly enough!

Meoryou,

Typically, a recession is defined as two contiguous quarters of decline in GDP. Whilst, at a push, I can foresee one bad quarter, I see nothing in the near future that it would hit two consecutive quarters. Clearly, another round of lockdowns could do that, so hoping that does not pass.

The Governor of the Bank of England was at pains in a press conference to say he thought that a recession was coming, but that it would not meet that technical definition of one! Go figure!

Good try, but no.

"If" being the operative word. Even before today's announcement of £18bn to be spent just in the UK alone, nowhere was it suggested by Sunak or any other member of the UK Government that BP was not investing "enough in the UK's energy supply".