Eeek!! I recently wrote about the tax increase on oil and gas in the north sea, well here is an update!
Yes, as predicted, investors are getting scared! Possibly the last thing the oil and gas industry needs!
Major oil companies, such as BP, Shell and Total, registered a drop from 60 to 39 (ouch). Wait, wait, what on earth does that mean?
The index is based on a 100 point scale, where the 50 mid-point divides positive and negative outlooks (OK, so definitely ouch!)
Brian Kinkead, supply chain director for Oil & Gas UK, said: “In this quarter we have seen the largest falls in confidence in terms of activity levels, investment and business confidence. Of the respondents surveyed, 50% said their optimism had decreased due to the tax increase. Another 25% of respondents reported high activity levels in this quarter, as they are already committed to a number of projects, but are likely to see tax changes having a negative impact on their business in the longer term. ”
The Treasury said in a statement it expected offshore company profits to remain high but that if they identified some potential impact on investment it would consider using allowances to deal with it.
Amazing short article in The Telegraph that shows the reaction of the big bosses of such companies that are effected.