Total Pulls £100 Million North Sea Drilling Investment After Windfall Tax

French oil company TotalEnergies has announced it will cut back on new well spending in the North Sea next year as a direct consequence of the Government’s windfall tax raid. The North Sea operator announced last night it would withdraw a whopping £100 million from its total investment – roughly a quarter of its spending on new wells – and abandon plans to drill a new well at its gas field off the coast of Aberdeen. Just ten days after Shell announced it was considering a cut to its £25 billion investment in UK energy for exactly the same reason…

This is, of course, despite Rishi claiming it was “vital we encourage continued investment by the oil and gas industry in the North Sea” earlier this year.

And how’s that all going?

Well, Total might not be the last to tighten their belts. Norwegian oil giant Equinor are now mulling whether to scrap their £8bn Rosebank energy project as well:

“The Autumn Statement did not help investor confidence and we are evaluating the impact of the energy profits levy on our projects.”

Equinor had previously claimed the project could provide 8% of the UK’s oil production between 2026-2030. Now it may not go ahead. Still, so long as the government is going after the “super profits” of the oil and gas companies, at least Sir Keir will be happy…

 

mdi-timer 2 December 2022 @ 10:22 2 Dec 2022 @ 10:22 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Shell Reconsiders UK Investment After Windfall Tax… Despite Calling For It

Guido’s old enough to remember when Shell boss Ben van Beurden appeared on-stage at a conference last month and called on the government, quite explicitly, to impose a windfall tax on energy companies. To the delight of Sir Keir, who couldn’t have asked for a stronger endorsement of his flagship policy…

At the time, van Beurden said:

“One way or another there needs to be government intervention. Protecting the poorest, that probably may then mean that governments need to tax people in this room to pay for it. I think we just have to accept as a society – it can be done smartly and not so smartly. There is a discussion to be had about it but I think it’s inevitable.”

As it turns out, van Beurden was right: it was inevitable. Jeremy Hunt obliged and whacked up taxes on companies like Shell last week in the autumn statement. What happened next was just as predictable…

Now Shell’s UK Chief David Bunch says the company’s planned £25 billion investment in UK energy might not go ahead… because of the windfall tax. According to the Telegraph, Shell now “cannot take it for granted” that the plan will go ahead, and they need to rerun the economics and take a view on a project by project basis.” Be careful what you wish for…

mdi-timer 22 November 2022 @ 15:15 22 Nov 2022 @ 15:15 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Liz ‘No New Taxes’ Truss Announces New “De Facto Windfall Tax”

The government has announced a new plan to impose a multi-billion pound levy on green energy firms to fund support to consumers. Renewable and nuclear electricity generators in England and Wales will now have their revenues capped after windfall tax-hating Liz Truss seemingly bowed to pressure to limit profits. The announcement came from BEIS last night, which is calling the new policy a “Cost-Plus-Revenue Limit” and spinning that it isn’t in any way a windfall tax “as it will be applied to ‘excess revenues’ as opposed to profits.”. If it walks like a tax, swims like a tax and quacks like a tax…

The latest backtracking on free market values by the government comes just 41 days after Liz Truss told party members at the London husting that they could read her lips, and there would be no new taxes under her leadership.

Nick Ferrari: “In 2019 listeners to my LBC show heard one Boris Johnson say ‘there will be no new taxes, read my lips.’ Can you say tonight ‘read my lips no new taxes’ on your administration?”

Liz Truss: “Yes.”

On Today this morning, Rees-Mogg tried performing a Jedi mind trick, saying “this is not a windfall tax…this is rationalising the market”…

Despite the government’s denial that the new revenue limit is a tax, the boss of RWE – the third biggest renewable power generator in Britain – has told The Times the move “is a de facto ‘windfall tax’ on low-carbon generators that, if not designed and implemented correctly, could have severe negative consequences for investment in the renewable and wider energy market and so for the energy transition.” Ed Miliband welcoming the policy with open arms should give the government sufficient pause for thought before it buys its own spin…

mdi-timer 12 October 2022 @ 08:40 12 Oct 2022 @ 08:40 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Starmer Stumped by Corporation Tax Questions

Sir Keir is in a flap trying to work out how to attack Liz’s new energy policy. There are plenty of arguments against it being posed by her free market allies, though given the Government’s policy is much grander than Labour’s own price freeze, it leaves very little room for attack from the left. During today’s debate, Sir Keir came close to misleading the House. His argument, that corporations should pay for the energy bailout, heavily implies to voters that the only way we get money out of energy firms’ profits is via a windfall tax. This is obviously untrue. Energy firms already pay 65% tax on profits, and any rise in profits leads to increased tax receipts…

Labour frontbenchers have been claiming this week that a windfall tax should pay for the energy price freeze, though Labour’s own sums accept the current windfall tax funds just £8 billion of their £29 billion spending proposals. Asked by Tory MP Jacob Young precisely what tax level on energy giants’ profits should be set at, Sir Keir totally dodged the question. Asked again by Mark Harper how high he wants a windfall tax to go, he once again ignored the question. Almost implying this is ill-thought out politicking…

Mark Harper also raised another key point. During his statement Starmer referred to £170 billion of unexpected excess profits by energy giants – a figure being repeated by Ed Miliband and Angela Rayner among others. This £170 billion, Labour implies, is completely up for grabs if only the billionaire-boot licking Tories would take the opportunity to tax it. Unfortunately for Labour this is also wrong. The £170 billion figure is global profits, only a fraction of which are registered in the UK and therefore taxable. As Joe Armitage points out, the figure for the UK, projected in 2022, is around £40 billion. Which is already, as stated, taxed at 65%.

GB News’ Tom Harwood explained this point well:

In total, extra profits of oil and gas giants this year amount to just £14 billion.” Even if all of that were taxed, it wouldn’t be a drop in the ocean of the government’s £100 billion-plus spend, and would certainly damage investment in energy extraction if taken off them. The commentariat loves to imply that Sir Keir’s some sort of details-obsessed political centrist. By the looks of it he’s got Diane Abbott doing his sums…

mdi-timer 8 September 2022 @ 14:58 8 Sep 2022 @ 14:58 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Rees-Mogg Can’t Bring Himself to Defend Comrade Rishi’s Windfall Tax

Jacob Rees-Mogg last night dodged questions about whether he now supports a windfall tax, after months of attacking Labour’s policy. In recent weeks we’ve heard free market favouring Jacob say it is “not true” that there is “this honey pot of business you can just raid whenever you feel like”, and “I think the idea of a windfall tax as a panacea to the inflation problem is wrong.” He’s in the unenviable position of being in a government doing just that…

On Beth Rigby’s show he could merely bring himself to say he supports collective ministerial responsibility, and celebrate that the tax isn’t retrospective. According to The TimesRees-Mogg raised concerns in Cabinet yesterday, suggesting “the package would be better funded by reducing government spending on infrastructure projects.” The paper puts BEIS Secretary Kwasi Kwarteng in this camp as well, with him telling allies he’s particularly concerned by BP’s announcement that it’s reviewing its plans to invest in the North Sea. Guido agrees with the anonymous cabinet minister who said “The politics of this is just so bad. We voted against it, we marched the whole party up the hill and are now taking them back down again. It looks like we’re being dictated to by Labour”…

mdi-timer 27 May 2022 @ 09:01 27 May 2022 @ 09:01 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments