Kistos Share Discussion Threads

[skyship] 04/12/2022 10:10

Billy Ray posted this interesting article over on the other thread:
==================================================================




Chancellor told he risks 'destroying' North Sea production altogether after increasing the levy from 25 to 35pc

ByCamilla Turner, CHIEF POLITICAL CORRESPONDENT26 November 2022 • 7:00pm

Jeremy Hunt’s windfall tax on oil and gas giants must be watered down to avoid industry collapse, Tory MPs have warned.

The Chancellor has been told that his so-called energy profits levy is “too blunt an instrument” in its current form and risks “destroying” North Sea production altogether.

It comes amid warnings from companies involved in North Sea oil and gas exploration that the sheer level of taxation now poses an "existential threat" to their industry and will lead to investment becoming "unviable".

Mr Hunt and Rishi Sunak, the Prime Minister, have faced criticism that the Autumn Statement did not include enough measures to spur economic growth.

Mr Hunt increased the windfall tax on North Sea oil and gas producers from 25 to 35 per cent, while also announcing it would be in place until 2028 rather than 2025, adding £19.4 billion to the existing bill.


MPs believe that unless a “sensible” floor price is agreed, energy firms will be “crippled” with higher taxes even when their profits fall.

Discussions are underway among rebel MPs about drafting an amendment to the Finance Bill - which is expected to be returned to parliament this week - to address this point. Some backbenchers have written to the Chancellor to express their concern about the windfall tax, while others have made their disquiet clear to the chief whip.

Sir John Redwood MP told The Telegraph that the windfall tax in its current form is “excessive” and will “damage the industry” as he urged ministers to “see sense”.
“We need to get as much oil and gas out of the North Sea as possible,” he said. “I don't believe it is a windfall tax if it doesn't stop when profits fall - it is just another tax on business, another tax on a business that is temporarily generating a lot of income but in the past has had heavy losses.”

Craig Mackinlay MP, the chairman of Net Zero Scrutiny Group, added: “We want more domestically derived energy. You do not get more domestically derived energy by taxing it more.

“While some of the supersize companies can accept they have had it pretty good for a while, what if those good times don't last? What happens if you have a more modest, normal profit? Are we going to still tax at 75 per cent? It is too blunt an instrument.”

Bob Seely MP said he is concerned about the security of oil and gas supply over the next decade, explaining: “We need that supply. There is no question about that. If we get this wrong and North Sea production collapses, a series of very bad things happen. For sure, we need to get tax from the industry, but we need to do so without destroying it.”

Separately, the Association of British Independent Exploration Companies has warned the Chancellor that the windfall tax on energy companies poses an "existential threat" to the industry.

Robin Allan, the association’s chairman, wrote to Mr Hunt arguing that taxing his members at 75 per cent will wipe out the industry “and with it, those jobs and our nation’s energy security”.

In the letter he went on to say that “UK Upstream companies can no longer shoulder this extreme open-ended tax burden”.

Arguing for the introduction of a price-floor, Mr Allan said: “Without such a mechanism and to continue down the path of the current anticipated 75 per cent rate, further investment in the UK has become unviable and so begins a rapid onset of the decline of the North Sea”.

[skyship] 04/12/2022 10:03

ANLEY - If you're going to start a thread then do learn how to do it properly.

Please go back to the Header - press EDIT - then at the very least add charts and company news.

Click over to the old thread to see how it should be done.

[billy ray] 01/12/2022 14:26

Chancellor told he risks 'destroying' North Sea production altogether after increasing the levy from 25 to 35pc
ByCamilla Turner, CHIEF POLITICAL CORRESPONDENT26 November 2022 • 7:00pm

Jeremy Hunt’s windfall tax on oil and gas giants must be watered down to avoid industry collapse, Tory MPs have warned.
The Chancellor has been told that his so-called energy profits levy is “too blunt an instrument” in its current form and risks “destroying” North Sea production altogether.
It comes amid warnings from companies involved in North Sea oil and gas exploration that the sheer level of taxation now poses an "existential threat" to their industry and will lead to investment becoming "unviable".
Mr Hunt and Rishi Sunak, the Prime Minister, have faced criticism that the Autumn Statement did not include enough measures to spur economic growth.
Mr Hunt increased the windfall tax on North Sea oil and gas producers from 25 to 35 per cent, while also announcing it would be in place until 2028 rather than 2025, adding £19.4 billion to the existing bill.
The Chancellor has been told that his so-called energy profits levy is 'too blunt an instrument' in its current form CREDIT: Zara Farrar
MPs believe that unless a “sensible” floor price is agreed, energy firms will be “crippled” with higher taxes even when their profits fall.
Discussions are underway among rebel MPs about drafting an amendment to the Finance Bill - which is expected to be returned to parliament this week - to address this point. Some backbenchers have written to the Chancellor to express their concern about the windfall tax, while others have made their disquiet clear to the chief whip.
Sir John Redwood MP told The Telegraph that the windfall tax in its current form is “excessive” and will “damage the industry” as he urged ministers to “see sense”.
“We need to get as much oil and gas out of the North Sea as possible,” he said. “I don't believe it is a windfall tax if it doesn't stop when profits fall - it is just another tax on business, another tax on a business that is temporarily generating a lot of income but in the past has had heavy losses.”
Craig Mackinlay MP, the chairman of Net Zero Scrutiny Group, added: “We want more domestically derived energy. You do not get more domestically derived energy by taxing it more.
“While some of the supersize companies can accept they have had it pretty good for a while, what if those good times don't last? What happens if you have a more modest, normal profit? Are we going to still tax at 75 per cent? It is too blunt an instrument.”
Bob Seely MP said he is concerned about the security of oil and gas supply over the next decade, explaining: “We need that supply. There is no question about that. If we get this wrong and North Sea production collapses, a series of very bad things happen. For sure, we need to get tax from the industry, but we need to do so without destroying it.”
Separately, the Association of British Independent Exploration Companies has warned the Chancellor that the windfall tax on energy companies poses an "existential threat" to the industry.
Robin Allan, the association’s chairman, wrote to Mr Hunt arguing that taxing his members at 75 per cent will wipe out the industry “and with it, those jobs and our nation’s energy security”.
In the letter he went on to say that “UK Upstream companies can no longer shoulder this extreme open-ended tax burden”.
Arguing for the introduction of a price-floor, Mr Allan said: “Without such a mechanism and to continue down the path of the current anticipated 75 per cent rate, further investment in the UK has become unviable and so begins a rapid onset of the decline of the North Sea”.
[Thanks to TerryM1 on the SQZ (other) bb]

[billy ray] 01/12/2022 09:50

hxxps://www.gbnews.uk/news/oil-exploration-firms-warn-of-complete-collapse-of-operations-in-the-north-sea/398281

[volsung] 01/12/2022 09:46

Bought a few more

[blueball] 30/11/2022 14:03

TTF gas up 9% today.

[adg] 29/11/2022 07:58

Interesting pice from the Moram research note;

New structure: This week Kistos has announced a new structure, where it creates a Finance company. To our best interpretation of it, among other things, it will allow Kistos to sell the NBP natural gas at TTF prices. This would allow Kistos to pay taxes for the difference (TTF-NBP) as a financial product and not as natural gas. Specifically, if Kistos does that with a certain amount of NBP production, it would pay the EPL in the UK at the NBP price and the difference (TTF-NBP) as a financial product (no extra taxes for energy production). And we repeat, this is only our best interpretation of the report they published this week. We are not experts in this type of law.

[blueball] 27/11/2022 15:18

Target price of 741p.

[blueball] 25/11/2022 11:06

Perfect bowl forming chart.

[jeff114] 25/11/2022 10:34

Gas prices rising, EU cap on gas very high and cheap as hell

[bigalan3] 25/11/2022 09:59

Why the sudden interest today?

[blueball] 24/11/2022 20:14

Stay long.

[mr. t] 24/11/2022 16:25

anley - what do you expect the implications are of that for Kistos' tax bill?

[anley] 24/11/2022 15:25

Remember that the UK has Double Taxation agreements with EU countries.

[blueball] 23/11/2022 18:00

TTF up 8% today.

[mr. t] 23/11/2022 17:20

You're probably right about tax losses. Still even if they offset the 30% corporation tax only, that's still helpful.

[marvelman] 22/11/2022 16:46

Surely the tax losses will only offset Corporation Tax liabilities. The Dutch WT will have to be paid in full (whatever it ends up as)

[mr. t] 22/11/2022 16:22

I like this comment on p. 38 of the circular:"The Group has significant tax losses carried forward available to offset future UK taxes due to the Total Acquisition. The Group is expected to benefit, to some extent, from the investment allowance under the Energy Profits Levy, through its planned capital investments program"I wasn't aware of the significant tax losses, it reads like the UK windfall tax may not be such a big issue....at least in the short term.

[vino] 22/11/2022 11:44

Over on LSE they are talking about HUR as a possible fit but why when they only have one well and with a shelf life and with decomisitioning costs
Have I got that wrong

[pjackson2] 22/11/2022 09:36

Could it be so the holding co can be registered in tax friendly jurisdiction.
I don’t know these things like previous poster.

[adg] 22/11/2022 08:32

Any thoughts/ideas of reasoning behind todays RNS?

Would there be any smart UK windfall tax raid avoidance behind it? I can’t see how but I’m an engineer not a financial guru

[marvelman] 22/11/2022 08:15

Ironic, was it not their boss who was encouraging it?

[blueball] 21/11/2022 20:23

Shell to reconsider 25bn investment in UK energy over windfall tax raid.