3.750
%
Positive
1
mm boe
35
%
The Democrats' tax proposals have heightened the risks to regressive movements in legislation, increasingly disadvantaging US oil & gas. The scale of the rollback on tax reforms will, if passed, transform not only the domestic but international investment approach. While manageable, what the latest changes mean that the once seemingly enduring fiscal stability and openness is now in significant risk of being lost, which could take a generation to recover. Nevertheless, recent energy inflation has precipitated a pause, giving hope that oil & gas will receive fair treatment. Nevertheless, the increased likelihood that the Democrats worst tendencies have been put in check, and the Republicans look set to retake the White House, we have raised our outlook to Positive.
June 18, 2024
Americas - North
mm bbl
bcf
North America, bordering both the North Atlantic Ocean and the North Pacific Ocean, between Canada and Mexico.
Concession
The fiscal regime that applies to the petroleum industry in the US consists of a combination of corporate income tax (CIT), severance tax and royalty payments.
The US is usually a positive operating for O&G. Not because of the limited law and regulations, but the transparency and uniformity of their application. The election of a Democrat to the White House, while not usually an issue, has taken on an added dimension in the Biden/Harris Presidency. Consequently, there is growing uncertainty over whether the legal framework governing O&G will continue to be uniformity and transparently applied.
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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