If you should shiver, think only this of us:
That there’s some corner of a foreign oil field
That is for our [Shell shareholders] reward. There shall be
In that rich earth a richer oil well concealed;
An oil well that Britain once had, developed, made revenue from,
Gave, once, her oil flows to those, her people to enrich,
A body of Britain’s, wealth now given to foreign people,
Enriched by the folly of Britain’s…………….. [insert names of culprits]
(Apologies to Rupert Brooke)
The recent decision by Shell to quit the Cambo oil field project was greeted hailed by the Green Brigade as a great victory.
Was I as a shareholder with Shell upset?
Not a bit of it!
In fact I was rather relieved!
Why?
Because had Shell (and the others) had gone ahead they would have been plagued by an endless stream of idiots dressed up in fancy dress outside their offices!
As it is Shell has instead decided to invest in countries like Brazil whose government and people have a more sensible attitude!
The result is that Shell has picked up a bargain!
This edited report from “Seeking Alpha” is reproduced below:
After a failed attempt at selling large, pre-sal oil blocks in 2019, Brazil cut prices by 80%+ and found buyers for two key blocks today. Having cut the signing bonus at Sepia from $5.5b to $1.3b, and cut the minimum production share from 28% to 15%, a consortium of Total, Petronas, and Qatar Energy submitted the winning bid today, offering to share 37% of production with the Government, and beating out a solo proposal from Petrobras.
At Atapu, the signing bonus was cut form $3.3b to $0.7b and minimum production share from 26% to 6%, where a consortium of Total, Shell and Petrobras submitted the only bid, offering to pay the Government 32% of production.
Perhaps more interesting than the bids, was the lack of interest – given the bids came in well above minimum productions splits, the return profile at the minimum was likely very compelling for majors like Chevron, Exxon, Equinor and Galp, all of whom have communicated interest in pre-sal blocks in the past.
Which begs the question, if the majors have largely left Canada, largely left Norway, cannot control production within OPEC+ and are no longer interested in Brazil, how reliant is the world on production growth from US onshore oilfields, where leading operators have moved away from a growth strategy?
Source: https://seekingalpha.com/news/3781445-brazil-oilfield-auction-shell-and-total-win-as-most-stay-home
British Gazette comment: As it becomes increasingly difficult to extract oil (and gas) from countries which have significant climate change protests, those countries which have oil and gas and don’t have such protesters will be on a winner.
Of course, we have seen this with the decline (in the UK) of energy intensive industries such as aluminium smelting. UK investors (such as Moi) have simply invested in companies that have set up their businesses elsewhere where costs are lower.
The aluminium will still get made. The manufactured articles will still get manufactured. This will however no longer take place in the UK – which means the jobs will be exported as well!
Our politicians are quite happy with this because they fear being ambushed by an idiot wearing a long red gown and a silly red headdress!
You see, as long as they avoid the dreaded red gowned idiots, they don’t mind condemning large numbers of Britons to work in what is now described as the hospitality industry – where low pay and insecure tenure of employment is endemic!