Serica Power is one in every of Britain’s high ten oil and gasoline producers, which delivers round 41,000 barrels of oil a 12 months.
Its portfolio of latest tasks consists of the Buchan redevelopment – 120 miles north-east of Aberdeen – the third-biggest underdeveloped discipline in UK waters behind Rosebank and Cambo.
Its chairman and performing chief government is David Latin, an trade veteran with greater than 30 years of expertise working within the upstream sector together with senior roles at BP and the multinational oil big, OMV Group, the place he headed its Norwegian operations.
In different phrases, he is aware of his onions.
Which is why when Latin warns that the Authorities’s insane tax struggle on oil and gasoline producers is driving Serica to have a look at new investments elsewhere within the North Sea – corresponding to Norway – we must always shudder. And presumably weep.
Squeezed: The federal government is maintaining its ‘windfall earnings’ tax in place lengthy after any potential justification for it based mostly on oil and gasoline costs
The incongruity is an excessive amount of to bear: the truth that Britain’s penal tax regime would possibly power a British oil producer to go to the land of the oil-rich Vikings to probe for power after we nonetheless have our personal black gold is absurd.
But that’s the state of play which Latin is warning about, not only for Serica however different UK oil producers.
If Serica and its friends do go elsewhere, so will the UK jobs, the tax revenues and extra critically, power safety.
Why, it’s a must to ask, would any authorities willingly penalise its oil producers after the power shock triggered by Russia’s struggle on Ukraine, sending oil and gasoline costs hovering and inflation rocketing?
Fairly rightly Latin factors the finger at Westminster – somewhat than Moscow – for the difficulty going through the sector.
Perversely, the Authorities is maintaining its ‘windfall earnings’ tax in place lengthy after any potential justification for it based mostly on oil and gasoline costs. (Serica bought oil at $63 per barrel of oil equal final 12 months, in contrast with $104 in 2022).
What’s extra, Chancellor Jeremy Hunt prolonged the tax to 2029. Labour will hit the trade even tougher if it involves energy: the occasion has threatened to extend the tax fee to 78- per cent and cut back the capital aid on funding, as in comparison with the current regime.
If present tax coverage succeeds in driving oil producers elsewhere, there is just one choice: we must import extra.
Even essentially the most ferocious of the anti-fossil gasoline brigade know that we are going to want extra oil and gasoline for many years to cowl the transition interval. Till now, maximising the restoration of the remaining UK reserves has been the agreed coverage.
However because the Serica boss factors out, this coverage has clearly been deserted due to the Authorities’s short-termism.
That has large penalties; extra risky and unreliable imports, much less UK tax revenues, fewer high-quality jobs and extra carbon as a result of provides should journey.
The Authorities’s place will not be solely risible within the quick time period however goes in opposition to all makes an attempt to maximise power safety for future generations.
So, too, is Labour’s plan to push up taxes but additionally to cease new North Sea exploration licences.
Paradoxically, Labour most likely received’t must as a result of explorers like Serica can have gone searching in different waters.
GMB union chief Gary Smith calls Labour’s coverage economically illiterate. The tragedy is that Tory coverage has been equally illiterate.
No to trade boss pay hike
Buyers have a tough choice right this moment. They vote on whether or not David Schwimmer, boss of the London Inventory Trade Group, must be paid one other £7million, taking pay to £13million.
Advisory corporations ISS and Glass Lewis are urging them to vote in opposition to.
The trade says he must be paid like his friends working Nasdaq or information corporations corresponding to S&P World.
It factors out that since taking on six years in the past, the American lawyer-turned-Goldman Sachs honcho has doubled the share worth.
Whereas true, this was due to the $27billion takeover of Refinitiv, which lifted shares and turned it into an information supplier that now accounts for the majority of revenues.
And that’s the elephant within the room: is it an information supplier or a capital-raising inventory trade? Can or not it’s each?
The London trade and Goal, its junior market, are struggling amid defections to Wall Avenue and low valuations, resulting in a takeover frenzy, primarily from US corporations, and onerous laws.
Schwimmer should present how he plans to enhance efficiency – to be extra like go-getting Nasdaq – earlier than he will get a hike.
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