Impact of North Sea Oil tax raid....
Discussion
http://www.advfn.com/news_Statoil-Postpones-U-K-Oi...
So a populist policy of cutting duty (temporarily) at the expense of oil firms could potentially reduce jobs, reduce investment and wealth, and risk our energy policy.
Nice one George.
A massive U-turn on it's way IMO.
So a populist policy of cutting duty (temporarily) at the expense of oil firms could potentially reduce jobs, reduce investment and wealth, and risk our energy policy.
Nice one George.
A massive U-turn on it's way IMO.
Caulkhead -
So you think just because they are a successful business they should keep investing in the UK even though they will pay higher taxes and will be working in a country where the Government is liable to pull rabbits out the hat like this?
This goes against everything the Government has promised - lower taxes and a more competitive UK to kick-start growth.
So you think just because they are a successful business they should keep investing in the UK even though they will pay higher taxes and will be working in a country where the Government is liable to pull rabbits out the hat like this?
This goes against everything the Government has promised - lower taxes and a more competitive UK to kick-start growth.
Caulkhead said:
Poor Statoil. How will they manage now with an income of only 137 billion krona and liquid prices up 'only' 23% and gas up only 17% in the last qtr of 2010!
Do you have their bank details so I can make a donation to keep them out of the poor house?
What a stupid statement.Do you have their bank details so I can make a donation to keep them out of the poor house?
The UK is no longer seen as an attractive investment for both UK and foreign oil companies. Statoil will simply drill elsewhere, it is our loss not theirs.
Huge mistake by the chancellor, he should have done the opposite. More activity means more employment, more income tax being paid, more corporate tax being paid...and so on. The idea of producers paying up to 81% tax just shows what a desperate state the country's finances are in.
Statoil will do fine, of course, there are plenty of places where they will be happy to spend their money. Meanwhile they'll sit on the licences until the next change makes them economic again, and we'll earn nothing from them.
Cheers,
FT.
Statoil will do fine, of course, there are plenty of places where they will be happy to spend their money. Meanwhile they'll sit on the licences until the next change makes them economic again, and we'll earn nothing from them.
Cheers,
FT.
Legend83 said:
http://www.advfn.com/news_Statoil-Postpones-U-K-Oi...
So a populist policy of cutting duty (temporarily) at the expense of oil firms could potentially reduce jobs, reduce investment and wealth, and risk our energy policy.
Nice one George.
A massive U-turn on it's way IMO.
First of many marginal projects to be scrapped, I'd bet.So a populist policy of cutting duty (temporarily) at the expense of oil firms could potentially reduce jobs, reduce investment and wealth, and risk our energy policy.
Nice one George.
A massive U-turn on it's way IMO.
pilchardthecat said:
Government promises, eh?
Tell me - have you ever visited the planet Earth, at all?
Point taken, but in fairness most of the other policies were in line with the general Government pledge - reduction in CT rate, increase in Entreprenuers relief, EIS scheme etc.Tell me - have you ever visited the planet Earth, at all?
I am just surprised at the level of stupidity here and fully expect a U-turn on this - who will replace the North Sea to fund the miserly duty cut is anyone's guess.
Legend83 said:
Point taken, but in fairness most of the other policies were in line with the general Government pledge - reduction in CT rate, increase in Entreprenuers relief, EIS scheme etc.
I am just surprised at the level of stupidity here and fully expect a U-turn on this - who will replace the North Sea to fund the miserly duty cut is anyone's guess.
I dunno - they know the $ oil price is only heading one way, and the blob of sub-sea oil that's now not economical to extract will become economical again in 6, 12 or 18 months, and when it does get extracted at the higher price they'll make more duty, more VAT and this new levy on top.I am just surprised at the level of stupidity here and fully expect a U-turn on this - who will replace the North Sea to fund the miserly duty cut is anyone's guess.
SplatSpeed said:
this is a windfall tax like all the others
where was all this vitriol for thoose windfall taxes?
remember the 3G sell of??
The 3G auction didn't slow down 3G activity - this will slow down the UKs oil and gas industry and demonstrably already has. Projects are being cancelled. Some companies valuations have fallen by as much as 20%. where was all this vitriol for thoose windfall taxes?
remember the 3G sell of??
This is a very heavy handed approach, lacking in subtlety, and displays either a disregard for, or a lack of understanding of, the market. Or both.
There is also the fact that this came out of the blue - what does that tell companies looking to invest in the long term future of the basin? How do you go about assessing the economic viability of future operations? Not confidence inspiring is it? Investors want stability.
Cheers,
FT.
gerradiuk said:
Its a bit of a Dogs dinner but in fact the new combined tax rate faced by Statoil would be 62% of its UK profits, compared with a rate of 78% levied by the Norwegian government in its home market.
Aye, but that number in isolation is irrelevant, the point is that the whole economic model of the project just changed. The rate of tax Statoil pays in Norway is not really relevant; the company exists to make money for Norway.
Cheers,
FT.
johnfm said:
They can fund growth from the residue of the unexpected windfall in revenues resulting from the oil prices, no?
Yes, the question is do they want to fund that growth in the UK, or invest somewhere else? I'm not trying to claim that oil companies are aren't making money, I'm pointing out that they can spend that money elsewhere, and that the UK needs to compete internationally for that investment.
Cheers,
FT.
johnfm said:
The increased tax rate still makes the oil companies' returns signficantly ahead of plan, no?
Unless they planned for oil prices to rise for $65/barrel to $115/barrel.
They can fund growth from the residue of the unexpected windfall in revenues resulting from the oil prices, no?
Of course, but perhaps they would rather fund growth elsewhere. Somewhere they might have confidence investing in and not have the rug pulled from under them.Unless they planned for oil prices to rise for $65/barrel to $115/barrel.
They can fund growth from the residue of the unexpected windfall in revenues resulting from the oil prices, no?
What FT said.
Edited by Legend83 on Wednesday 30th March 14:43
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