Europa’s North Sea regulatory rift indicative of ‘overly penal’ fiscal regime - analyst
Published: 15:46 03 May 2024 BST
Broker Panmure Gordon pulled no punches when discussing the rift between Europa Oil & Gas (Holdings) Plc and regulators in charge of distributing North Sea exploration licences.
Europa was offered a licence by the North Sea Transition Authority (NSTA) under the recent 33rd UKCS licensing round, with the caveat that the group partner with an unnamed third party for said licence.
Europa declined this “forced marriage” and cited what Panmure echoed as “the overly penal UK fiscal regime and worse outlook under a Labour Government”.
“This is another warning shot to the Westminster politicians (of all hues) about the harm they are doing to the UK O&G (oil and gas) regime and energy security position,” said Panmure.
“Sadly, I doubt that it will even register, let alone lead to change, as they think kicking O&G companies is what the public wants and that they are all making supernormal profits.
“However, they continue to kick the wrong companies and ignore the utility companies who are the ones that are making the supernormal profits and assisting inflation to remain high.”
Europa said it will instead start exploring new opportunities in Equatorial Guinea and opt out of any North Sea venture.
“This has reduced the economic and strategic attractiveness of the licence. As such, the company believes that its resources are better deployed on its existing assets and looking for new opportunities within its core areas of focus,” Europa said.
