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The tech sector’s weight in the S&P 500 is roughly eight times that of energy, a gap wider than at the height of the dot-com bubble.
https://www.bloomberg.com/opinion/articles/2024-02-13/big-oil-is-a-hedge-in-waiting-for-magnificent-seven
This hasn't got anything to do with ENQ as such, but i bumped into this and this could also be an explanation for the abyssmal share price development : "Seven investment firms have taken short positions in Petrofac, with Helikon Investments Limited holding the largest position at 3.5%. This represents a significant bet against the company's future prospects.
GLG Partners holds the highest number of short positions for UK companies, with 47 active shorts. This aggressive shorting strategy reflects the growing trend of investors betting against companies that they believe are overvalued or facing significant headwinds.
Petrofac is not alone in its struggles. The prolonged economic stagnation in the UK is believed to be driving short exposures, with investors showing concerns about various companies. Kingfisher, the parent company of B&Q, and Hargreaves Lansdown were the second and third most shorted stocks, respectively.
This trend is expected to continue in the lead-up to the election, as investors look to hedge their bets against potential market volatility. However, it also raises questions about the long-term health of the UK economy and the ability of companies to weather the storm.
As the most shorted stock in the UK, Petrofac finds itself in the crosshairs of a broader trend of shorting. "
But even in this otherwise positive article :
The party said the move to increase the windfall tax – in line with that of Norway – would “end the loopholes in the levy that funnel billions back to the oil and gas giants”.
Last week, BP reported its second-highest annual profit in a decade, despite it being half the level it announced in the previous year.
The independents MUST make clear what the difference is beween BP which only makes a fraction of its revenue from the North Sea and themselves who are being impaled by the EPL as they have no operations outside the North Sea.
That was something i wanted to write too, Stevo 12. Not with your numbers as i am not capable of doing that. But i do hope Equinor and Ithaca simply cancel/put on ice the Rosebank development...The oil industry has been far too complacent with Hunt's measures and needs to fight back and make the broad public aware what will be the financial consequences for them if Labour -even worse than Hunt- gets what it wants.
The farmers have scant sympathy for the argument that such measures are in their own interests because of the threat climate change poses in terms of more flooding or heatwaves. Labour’s shadow climate change minister under Jeremy Corbyn, Barry Gardiner, tried a version of this argument on Radio 4’s Today programme on Thursday, when he described Sir Keir Starmer’s retreat on the £28 billion pledge as not just “environmentally irresponsible” but “economically illiterate”.
Climate change, quoth Barry, would cost the UK “£72 billion a year” by 2050 and “£140 billion a year” by the end of the century, according to the LSE. But since the UK is responsible for barely 1 per cent of the world’s anthropogenic carbon emissions, even if we were to cease all our activities tomorrow, it would make no observable difference to those alleged “climate costs” to us (and not just because we would have become extinct).
On the same programme a day later Rachel Reeves argued that Labour’s “decarbonisation by 2030” was eminently deliverable, because of the way the party would “reform the planning system”. She’s right to want to do that, at least. Three weeks ago the government said it would delay its decision on whether to approve an interconnector bringing us French electricity with cables from Normandy to Portsmouth — which the Hampshire locals have been opposing. Apparently the Ministry of Defence has just asked for “time to consider its position.” Really? It was in 2019 that the company involved, Aquind, applied for planning permission to supply the UK with electricity, in the words of its spokesman, “when the wind isn’t blowing”.
Five years on, it still hasn’t got an answer. Yet Labour claims it can, in the same length of time, create an entirely new version of the National Grid. It’ll be a manifesto commitment, it says — trust us.
I think not.
Another advocate of the net-zero agenda who deals in hard facts rather than fairytales is Sir Dieter Helm, perhaps the country’s leading energy economist, who in 2017 was commissioned by the energy secretary of the day, Greg Clark, to produce a Cost of Energy Review. Clark didn’t much appreciate what Helm produced, which was devastating on the way the real costs of wind power (because of its unreliability) had been obscured: “Intermittent generators … do not face the full transmission, distribution and backup capacity costs they impose on the system. These costs do not go away simply by being disguised within the system.”
Later, Helm demolished the claims of one of Clark’s successors, Grant Shapps, who had claimed in a document entitled Powering Up Britain that the clean energy investments would all pay for themselves: “The trouble with this argument is that … it simply is not true. No amount of assumptions to this effect make the models and predictions credible.”
Sir Dieter was no less blunt about the Labour Party’s abandonment in June 2023 of its original proposal to spend £28 billion “every year” on the “clean energy transition”: “The next retreat [will be on] net zero for the power sector by 2030, an entirely implausible objective … The supply chains do not exist yet to do all this fast-track investment.” But Labour is still promising the entirely implausible.
A similar point was made in September by Gary Smith, head of the GMB union (which has many members in the gas industry). He told The Spectator of Labour’s plans to replace all gas-fired power stations by 2030: “I don’t even worry about it. It cannot be done. The National Grid can’t get [undersea] cables. There are four suppliers of cables in the globe. They’re all booked out to 2030. What are we going to do? Put up the infrastructure and have nothing to plug in? It’ll look great, but we’ll be watching it in the dark.” Smith also referred to the idea of “green levies” on electricity consumers to fund the transition to renewables as “a modern-day poll tax”.
We had riots over that, and public opposition to the poll tax was the true reason for the fall of Margaret Thatcher. In France, Germany and the Netherlands we have recently seen governments back down in the face of demonstrations against the imposition of green levies that hit hard, above all in rural communities.
£28bn, a drop in Labour’s imaginary green ocean
The party’s pledge to decarbonise by 2030 remains the entirely implausible goal
hy is everyone — well, everyone in politics — so exercised about Labour’s discarding of the previously “unshakeable commitment” to spend £28 billion of taxpayers’ money on its “green prosperity plan”? This is almost a margin-of-error figure compared with the cost of its promise to make the UK’s electricity supply emission-free by 2030 — a promise the shadow chancellor, Rachel Reeves, reiterated last week.
The present government is notionally committed to the same grid electrification strategy as Labour, but with 2035 as the target date. Since the election is most likely to be in November, this means Labour claims it will do in five years what the Conservatives pretend to believe can be achieved in ten.
As Professor Gordon Hughes, co-author of a World Bank report, The Costs of Adapting to Climate Change for Infrastructure, told me: “Such crash investment programmes lead to rapid cost inflation. Experience tells us that offshore costs would double very quickly if Britain and other countries in western Europe really tried to meet their targets up to 2035. Similarly for the investments needed in transmission and distribution.”
And, as I say, Labour proposes to “invest” at twice the pace promised by the Conservatives. Although Starmer and co waffle on about creating something called Great British Energy, they envisage almost all of this being funded by private-sector energy suppliers. Which will in turn charge us, their customers. Rupert Darwall of Real Clear Energy argues that in consequence we might expect an average household to be paying an energy bill of between £3,000 and £4,100 a year. That is way above the taxpayer-funded “energy price cap” that has followed Russia’s invasion of Ukraine. In other words, it is politically impossible.
It is especially impossible when politicians — of all parties — have spread the delusion that zero-carbon energy will be cheaper than gas (or indeed coal, still supplying about 60 per cent of China’s electricity). In Davos last month Joe Kaeser, the chairman of Siemens Energy — which happens to be the biggest manufacturer of wind turbines in the UK — declared: “You need to stick by the facts at some point, even though facts sometimes may not be liked … If you want to have cheap energy, you need to be gas-fired. That’s the cheapest way, the most secure way, if you calculate the whole thing from the beginning to the end.”
It is about time the independents come together and make a joint press statement to show the broad public who they are, that they are the ones who have invested billions in the North Sea without much to show for it unless employment and energy security. And taxes. That the "giants" have left the NS for good. How dire the situation for a commodity dependent company is when the price of oil has been in the doldrums for years and you have taken on debt to develop fields before you can start to think about making a profit. Make it known the taxation is unfair and will contribute to the demise of an industry and will make the road to the transition impossible.
Krakenoil, 2 persons (Mansardman and Dumbly) have asked you to back up your statement "he (= Starmer) did say it would only be the majors that will have the WFT increased". I am the third person asking you.
I think you are taking your wishes for reality.
"The Energy Profits Levy, which is due to run until March 2028 will now run until the end of the Parliament, probably late 2029. The rate at which excess profits are taxed will also rise from 75 per cent to 78 per cent, putting it on a par with a tax levied in Norway."
https://www.dailymail.co.uk/news/article-13062135/Keir-Starmer-Labours-28bn-green-investment-plan-windfall-tax.html
One of the best authors on US and Canadian oil companies i follow states it best in one of his articles "Value is still in the doghouse" : "You have really had just a long bear market exception for the "one decision" type stocks. The indexes may have hit new highs but its really only a few stocks participating. Until there is that final give up sell off, this is likely to continue." Stop looking for logic, there isn't any.
Vicki Hollub from OXY predicts oil supply shortage by 2025 : https://oilprice.com/Latest-Energy-News/World-News/Buffett-Backed-Occidental-CEO-Says-Oil-Shortage-by-2025.html
Not only we and other UK-listed oilers as HBR, ITH, GKP, GENL , CNE, TLW seem to have the problem of incredible valuation compression : did you have a look at valuation of telco's (BT, Vodafone)? Not nice long time charts. Oil service providers (Petrofac has billions in orders and is trading at MC less than £ 150M)....
Breaking my head why we keep sinking with Brent over $75/bl, but that doesn't make me wiser....
“For the sector to trade at a higher multiple, the investors need to view oil as moving back into an era of scarcity”...
https://www.bloomberg.com/news/articles/2024-02-04/big-oil-s-optimism-faces-reality-check-in-tech-obsessed-market?srnd=premium-europe
or : https://finance.yahoo.com/news/big-oil-optimism-faces-reality-140000065.html