RE: SP26 May 2024 21:13
Recent article:-
North Sea energy firms look beyond UK after tax squeeze25 May 2024 12:14
North Sea energy firms look beyond UK after tax squeeze
North Sea oil and gas producers are merging and shifting overseas as Britain's windfall tax slashes profits and as the opposition Labour Party threatens more tax if it wins the next general election.
The change of strategy could accelerate the decline of domestic production, risking increased dependency on imports, greater vulnerability to higher consumer prices and more job losses.
Oil majors such as Shell, Chevron and Exxon Mobil have long since pulled back from the ageing basin in pursuit of more profitable oilfields, divesting assets to smaller producers.
These independent oil and gas producers are now looking further afield and merging to cut costs and boost revenue.
"Unfortunately, the UK government has turned the UK North Sea into a very harsh business environment," Gilad Myerson, executive chairman of Ithaca Energy, one of the largest North Sea producers, told Reuters last month.
"We're more interested in doing something that diversifies us outside of the UK right now, because that's probably our biggest risk," said David Latin, Chairman of Serica Energy, highlighting opportunities in Norway.
Ithaca, which has stakes in two of the largest remaining undeveloped oilfields in the North Sea, has agreed to combine its operations with the UK assets of Italy's Eni,
"When you have a fiscal challenge, the bigger you are, the stronger you are," Ithaca's Myerson said, adding the company was looking to expand overseas to Norway, Denmark and elsewhere.
Harbour Energy, meanwhile, agreed in December to acquire oil and gas assets from Wintershall Dea in an $11.2 billion deal.
And last week, Chevron said it plans to sell its remaining assets after more than 55 years in the basin, although the decision was unrelated to the windfall tax, it said.
"Any 'windfall' due to high commodity prices has long gone and the high tax situation is ill-suited to a mature oil and gas basin such as the UK North Sea," Serica's Latin said.
Production in the North Sea has declined to around 1.2 million barrels of oil equivalent per day (boed) in recent years from a peak of over 4.5 million boed in 1999.
Analysts at brokerage Stifel estimate that over the remaining lifespan of the North Sea basin, a higher tax rate and removal of the investment allowance would lower investment by 30 billion pounds ($38 billion) more than its current estimates, leading to a faster decline in output.
Under that scenario, Stifel projects that by 2030, the UK's oil and gas output would halve…
My comment:………
MAJORS SHOULD FARM INTO ECO !
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