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Shell Blames Brown's Taxes For Exploration Cuts

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The following is an extract from 'The Chemical Engineer'

Shell has cut its North Sea exploration programme by a third, blaming its decision on Gordon Brown's tax hikes. The company had planned to build three drilling rigs but has now cut the number to two. The doubling of corporation tax for North Sea producers from 10% to 20% in early December forced the decision, says Shell. Other companies including BP are reviewing investment in the area following Brown's announcement.

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If he keeps on squeezing us with taxes and inflation it's all going to come crashing down and the Tories will win by default - then they'll just keep taxing us AND cut back on everything

Edited by dnd

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This was well known, the amount of exploration plummeted the last time Brown hiked north sea levies, this is exactly what you need when oil prices are high and new production needs to be brought on stream, punish them and drive companies to make better return on investment elsewhere.

Talk about money for old rope or flogging a dead horse, the North Sea is basically dead as a growth area, Brown is trying to squeeze more out of increasingly falling production :-

Treasury oil raid brings end of North Sea closer

US oil giant poised to quit North Sea

Shell blames Brown for its new North Sea cuts

North Sea oil tax: we’ll all go south

BP sells up as North Sea oil flow slows

Canadians to cut North Sea assets

An Analysis of the UK North Sea Production

Of course if you're smoking the same sort of stuff the DTI is inhailing then non of this is a problem.

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Taking a contrarian position. If Shell saw a profit in the exploration they would build the tax into their income forecasting as higher crude prices. If they can't do that then its not profitable. I pay tax. Why not Shell?

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Well said Elizabeth, it's just sour grapes from these billiob-dollar companies. Britain has some of the lowest oil taxes in the world. I believe Norway levies over 80% on oil company profits, and the public there have 100 billion stashed away to pay their pensions. In some parts of the middle east oil taxes are up to 90%. If Shell doesn't want to drill in the North Sea then I'm sure some smaller company will instead.

Edited by FollowTheBear

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Taking a contrarian position. If Shell saw a profit in the exploration they would build the tax into their income forecasting as higher crude prices. If they can't do that then its not profitable. I pay tax. Why not Shell?

Your hooked on ideology. The answer lies with practical realities. If the tax is too high, oil companies will find it more profitable to pursue business opportunities eleswhere. Industry throughout the UK is struggling with taxes. That is why unemployment is rising.

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Taking a contrarian position. If Shell saw a profit in the exploration they would build the tax into their income forecasting as higher crude prices. If they can't do that then its not profitable. I pay tax. Why not Shell?

One of the problems is that the oil left in the north sea is expensive to get at. So if you work out that you have 30% profit from doing so, but brown wants 2/3 of that, then why take the risk, when if the oil price falls, getting the oil becomes more expensive, you will be losing money on it.

Its a double wammy not to extract it, as we will import more oil, pushing the balance of payments even further in the wrong direction!

Brown would have gotten plenty of money by letting them extract the oil anyway, but by being reckless with spending, means he has to dream up taxes and this one will cost him and the country dear.

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One of the problems is that the oil left in the north sea is expensive to get at. So if you work out that you have 30% profit from doing so, but brown wants 2/3 of that, then why take the risk, when if the oil price falls, getting the oil becomes more expensive, you will be losing money on it.

Its a double wammy not to extract it, as we will import more oil, pushing the balance of payments even further in the wrong direction!

Brown would have gotten plenty of money by letting them extract the oil anyway, but by being reckless with spending, means he has to dream up taxes and this one will cost him and the country dear.

Good one!

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Taking a contrarian position. If Shell saw a profit in the exploration they would build the tax into their income forecasting as higher crude prices. If they can't do that then its not profitable.

Basically that's what Shell have said, it's not in their commercial interests to risk shareholders cash on speculative exploration in fields that would benefit the government more than the company should it prove successful. They can take their (£100k a day) rigs elsewhere, somewhere with better prospects and assured deposits and without a government that can take up to 66% of the riches for itself and dip in for the rest if required.

There is nothing special about the North Sea any more, much like the British state itself it's simply a matter of managed decline.

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Industry throughout the UK is struggling with taxes. That is why unemployment is rising.

Well, well - I'll be b_ggered! So that's the answer! Having examined every issue that affects the British economy, this 'dog' has narrowed the whole problem of rising unemployment down to a single reason! What a genius she is! Why didn't the rest of us here, plus all the country's economists and all the government advisers not see this simple answer? We must be blind.

'dog' - you're a genius. Or, should we say -

'genius' - you're a dog.

p

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Well, well - I'll be b_ggered! So that's the answer! Having examined every issue that affects the British economy, this 'dog' has narrowed the whole problem of rising unemployment down to a single reason! What a genius she is! Why didn't the rest of us here, plus all the country's economists and all the government advisers not see this simple answer? We must be blind.

'dog' - you're a genius. Or, should we say -

'genius' - you're a dog.

p

Near but not quite. Tax is one half of the problem. Red tape is the other one.

Have a look at Ireland if you want to see what a benign tax climate can do.

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Near but not quite. Tax is one half of the problem. Red tape is the other one.

Have a look at Ireland if you want to see what a benign tax climate can do.

Insane house price bubble?

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Near but not quite. Tax is one half of the problem. Red tape is the other one.

Have a look at Ireland if you want to see what a benign tax climate can do.

Yeah, income tax at 45%. Irelands 'miracle' economy has done little for ordinary people there. It's been great for foreign companies to avoid taxes and then shift their money back home.

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Yeah, income tax at 45%. Irelands 'miracle' economy has done little for ordinary people there. It's been great for foreign companies to avoid taxes and then shift their money back home.

Well you are certainly talking a load of old tosh!

http://www.ireland.com/newspaper/front/200...1DEVELOPED.html

The 2005 Human Development Report, published by the UN Development Programme yesterday, found Irish people to be the second wealthiest in the world, with a GDP per head of $37,738 (€30,384).

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Insane house price bubble?

Elizabeth

I certainly agree that the house price bubble has been bad for business. I know only too well how difficult it has made fund raising for business. Despite this, the house bubble cannot compare to the damage being done by high taxes and red tape. I have heard from too many companies that they are making no new investments in the UK. Many think that the far east is the danger. It is certainly part of the problem but plenty of European countries are also taking jobs away from the UK.

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Your hooked on ideology. The answer lies with practical realities. If the tax is too high, oil companies will find it more profitable to pursue business opportunities eleswhere. Industry throughout the UK is struggling with taxes. That is why unemployment is rising.

yup!!!!!,over-regulation is killing this country.

...businesses are not stupid,they will invest where they will get the best return on their money.nu-lab have shown themselves up to be economically inept(again).....no amount of high morals will sort out your problems if the ability to bankroll the changes goes out of the window.Whether they like it or not,tree-hugging socialists are slave to cold,hard economics.The sooner they realise this the better.

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yup!!!!!,over-regulation is killing this country.

...businesses are not stupid,they will invest where they will get the best return on their money.nu-lab have shown themselves up to be economically inept(again).....no amount of high morals will sort out your problems if the ability to bankroll the changes goes out of the window.Whether they like it or not,tree-hugging socialists are slave to cold,hard economics.The sooner they realise this the better.

Sorry? which high morals are we talking about? I have never counted Tony Blair amongst my tree-hugging hippy socialist fellow travellers.

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Elizabeth

I certainly agree that the house price bubble has been bad for business. I know only too well how difficult it has made fund raising for business. Despite this, the house bubble cannot compare to the damage being done by high taxes and red tape. I have heard from too many companies that they are making no new investments in the UK. Many think that the far east is the danger. It is certainly part of the problem but plenty of European countries are also taking jobs away from the UK.

Shell itself is a case in point, with many of their corporate functions moving to Den Haag from London. The UK still has comparative advantages that can result in attraction or retention of jobs in some areas, but the picture as a whole is not encouraging. In the financial services sector London generally is probably winning jobs from Europe, but losing many more to India.

Red tape and payroll taxes are a problem in the UK business of the firm I work for, rates less so, but lack of basic skills is worse, and we end up overpaying for people with only acceptable literacy/numeracy and merely reasonable attitude to work. I am not exaggerating when I say that our cleaning lady in Germany is better educated than most of our UK employees, for example reading Harry Potter in English.

The dead hand of government that believes in education, edikation, ejjikashin also ensures that while our staff turnover is generally low we have lost decent staff to the public sector for higher-paying non-jobs.

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Basically that's what Shell have said, it's not in their commercial interests to risk shareholders cash on speculative exploration in fields that would benefit the government more than the company should it prove successful. They can take their (£100k a day) rigs elsewhere, somewhere with better prospects and assured deposits and without a government that can take up to 66% of the riches for itself and dip in for the rest if required.

There is nothing special about the North Sea any more, much like the British state itself it's simply a matter of managed decline.

100 Grand a day??? Maybe a couple of years ago. Rig I'm sitting on right now cost's about half a million a day all in.....................

Why would Shell want to pay half a million a day to drill for oil in the North Sea and pay Gordon's massive taxes, when they can go to Oman for Example and have a rig drilling for Oil and pay 25-30K a day?? Believe me, I was in Oman working for them Last year so I know what I'm talking about. I switched sides to BP last december and hence why I'm bobbing up and down in the ocean right now.

Well done Gordon!!!!!!

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Well you are certainly talking a load of old tosh!

http://www.ireland.com/newspaper/front/200...1DEVELOPED.html

Actually, you are talking a load of old tosh! Blimey, your manipulation of statistics is something a VI would be proud of. This figure doesn't take into account the cost of living in Ireland and the fact that income is very widely distributed. I get my information from people who live in Ireland not from some sweeping statistic.

Edited by FollowTheBear

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Actually, you are talking a load of old tosh! Blimey, your manipulation of statistics is something a VI would be proud of. This figure doesn't take into account the cost of living in Ireland and the fact that income is very widely distributed. I get my information from people who live in Ireland not from some sweeping statistic.

Never forget the 'First Law of Holes'

When you are in one, stop digging!

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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