With PM Cameron just having jetted into Aberdeen to grab a bit of positive publicity and Treasury first secretary Alexander scheduled to be in Europe’s Energy Capital in a couple of weeks for a bunch of engagements, including a (SCDI) Scottish Council Development and Industry dinner, this looks suspiciously like a government charm offensive.
However, fine words, platitudes, pledges of support for the North Sea, call then what you like; when they are uttered by politicians, it is just so much hot air.
Regardless of what they say, without concrete actions now, especially on the selective corporation tax, field allowances and decommissioning fronts such visits are next to pointless.
Or are they? At least Mr Cameron has actually visited Aberdeen and seen for himself, something of the incredible spirit resident here … that steely determination to make the North Sea a success, despite the tactically appalling decision by Treasury to milk the industry for yet more tax. But then I’ve made my views on that perfectly clear in past editions of Energy.
Naturally, his office/DECC chose to involve our PM in one of the highest profile and largest big brand projects currently gestating on the UK Continental Shelf. And I note that the latest observations by analysts Wood Mackenzie appears also to concentrate on big brand-led big projects of which there is actually a respectable list coming together.
No surprises there as the big guys like BP really are the only companies with the financial muscle to carry projects such as Clair Ridge through to commercial production, apart from mid caps like Apache and Talisman. In fact, the majors have always ruled the North Sea roost and are not going to vacate their perches anytime soon to smaller brethren.
But the current government coupled with the banks, have created a near impossible environment for oil juniors to make headway on the UKCS … you know, the kind of companies that DECC’s predecessor, the DTI, was so keen to promote.
They have been especially badly let down by the Cameron Administration and especially the impossible arrogance of Mr Alexander and his boss, Chancellor George Osbourne with their 2011 budget tax grab … a hike that led to mostly dramatic reductions in the valuations of stock exchange-listed players, thus making it nearly impossible for most to make meaningful headway and forcing into being taken over by cannibal mid-caps.
It’s quite simple really Messrs Cameron, Osbourne and Alexander … drop the tax hike, or at least cut it in half … and really get behind one of the very few decently healthy industries/business sectors left in Britain. That will pay real dividends to our besieged economy. Your current approach is plain wrong.