Jeremy Corbyn, leader of the Labour Party, speaks at the Confederation of British Industry’s (CBI) annual conference in London, November 19, 2018. — Reuters pic
LONDON, Nov 21 — Shares in some London-listed oil and gas producers including Tullow Oil, Premier Oil and Cairn Energy fell today after the main opposition Labour Party pledged to raise taxes on the sector if it wins a Dec. 12 election.
Labour said in its manifesto it would introduce a “windfall” tax on oil companies “so that the companies that knowingly damaged our climate will help cover the costs.”
It added it would safeguard jobs and skills that depend on the offshore oil and gas industry.
Tullow shares were down 1.4 per cent, falling to their lowest since 2016, Premier shares fell 1.9 per cent and Cairn shares 1.3 per cent by 1219 GMT.
Oil prices, which often influence share prices of oil and gas producers, turned positive today, erasing earlier losses.
Industry body Oil and Gas UK (OGUK) said it had received no further information other than the manifesto Labour published.
“Any increase in tax rates will drive investors away and damage the long-term competitiveness of the UK’s offshore oil and gas industry, threatening jobs and future tax revenues and needlessly damaging the UK economy,” said Gareth Wynn, OGUK stakeholder and communications director.
“Meeting as much as possible of UK demand from our own sources avoids offshoring emissions to other countries and helps us maintain the industrial expertise we need for engineering a future net zero energy system here in the UK.”
Tullow and Premier declined to comment. Cairn did not immediately respond to a request for comment.
“It is not currently clear who the tax would be applicable to, how it would be calculated, or over what time frame it would be payable,” analysts at Redburn said in a note.
“BP, Shell, Total, Eni, Exxon, Equinor and Repsol all have operations in the UK, so could in theory be targeted alongside the UK (exploration and production companies).” — Reuters
