Calls for windfall tax as North Sea oil and gas profits soar
Here was I thinking changing times had done for the likes of these big oil and gas giants….With more homes off grid in rural settings these rising costs are likely to hit rural dwellers hardest. This article tells us:
Bumper shareholder payouts, soaring profits, booming asset valuations: the oil and gas industry has bounced back from the depths of the pandemic with a vengeance.
After a difficult 2020, when plunging demand led in some cases to negative prices, crude recovered in 2021 and wholesale gas prices have soared in Europe and the UK. Gas has risen as much as tenfold to new all-time highs, due to factors including low storage capacity, strong Chinese demand and low wind generation during the summer.
BP boss Bernard Looney said recently illustrated this bonanza when he said the oil and gas giant has become a “cash machine”. North Sea oil and gas companies are expected to report near-record cashflows of almost $20bn (£14.9bn) for the current financial year, according to industry experts at Wood MacKenzie.
The revival of the industry’s fortunes has spurred calls for a windfall tax on North Sea producers, with the proceeds used to subsidise energy bills for households facing a cost-of-living crisis. The Liberal Democrats first made the call last week, and Labour also took up the call at the weekend. Rachel Reeves, shadow chancellor of the exchequer, said: “There is a global gas price crisis, but 10 years of the Conservatives’ failed energy policy, and dither and delay, has created a price crisis that’s being felt by everyone. We want to stop bills going up.”
The Conservative former energy minister Chris Skidmore has also publicly backed the idea, which has been rejected by the government.
Shell, the world’s largest producer and trader of liquefied natural gas (LNG), said last week that profits would be higher than expected thanks to high prices.
Unlike gas that arrives via pipelines from fields in the North Sea, LNG is shipped across oceans to the highest bidder, meaning companies like Shell benefit from surging global prices.