In considering oil & gas, the Sunak & Hunt double team is more Tweedledum and Tweedledee than shock and awe. The reimposition of the fracking ban is a body blow to the UK's creditability as an investment destination, which when coupled with the number of policy changes and punitive appraoch to oil & gas, including the revision to the Energy Levy. Furthermore, it is now likely that Labour will form the next government, the Tweedledum and Tweedledee doubleact is likely to be moved to Dumb and Dumber. All of thee factors combine to undermine any long-term investment confidence, making external investment difficult to justify. Consequently, the outlook has been downgraded to Negative and risk premia upgraded to 5%. Any further deterioration will lead to further upgrades in risk premia.
November 21, 2022
Europe - North West
Western Europe, islands - including the northern one-sixth of the island of Ireland - between the North Atlantic Ocean and the North Sea; northwest of France.
The fiscal regime that applies in the United Kingdom (UK) to the oil and gas industry consists of a combination of corporation tax, supplementary charge and petroleum revenue tax.
The terms of the UK’s future relationship with the EU are still under negotiation, but it is widely expected that trade between the UK and the EU will face more friction following the UK’s exit from the single market. UK legal, regulatory, and accounting systems are transparent and consistent with international standards. The UK legal system provides a high level of protection. Private ownership is protected by law and monitored for competition-restricting behavior.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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