Sterling is tumbling today after reports over the weekend that the yes campaign on Scottish independence appear to be getting the upper hand with the vote 10 days away. After months of comfort that the United Kingdom would probably remain intact, people are not so sure anymore after the latest polls indicated that Scots are not marginally in favour going it alone. The latest YouGov poll put the “Yes” campaign on 51%, with the campaign to maintain the Union on 49%.
Small cap oil and gas explorers focusing on the North Sea haven’t had an easy time of late with sentiment firmly in the bear camp in many cases. Xcite Energy, Faroe Petroleum, Cairn Energy, Hurricane Energy, Ithaca Energy and many others would be impacted by a fight between London and Edinburgh in the case of a Yes vote in terms of who would own what in terms of a break up of oil and gas assets in the North Sea. In addition, for those based in Scotland, any potential switch from the pound would again be unsettling.
Alex Salmond and the Treasury have been arguing about the potential value of oil and gas production in British waters and although output is down in recent years as fields mature and taxes have stifled investment, billions of barrels of oil still remain to be extracted. Non conventional sources of oil like Xcite’s and Statoil’s Bentley and Bressay heavy oil fields and Hurricane’s fractured basement reservoir’s have offered the opportunity for the UK to tap into reserves which were once unaccessible.
The next week and a half will be fascinating to see how things turn out for the United Kingdom and the North Sea oil and gas industry will be holding its breath. The markets hate uncertainty and at the moment there is plenty when it comes to the future of the union.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.
by contrarianuk
Potential Yes vote to Scottish independence adds to uncertainty for North sea oil companies
Sep 8, 2014 at 8:36 am in Market Commentary by contrarianuk
Sterling is tumbling today after reports over the weekend that the yes campaign on Scottish independence appear to be getting the upper hand with the vote 10 days away. After months of comfort that the United Kingdom would probably remain intact, people are not so sure anymore after the latest polls indicated that Scots are not marginally in favour going it alone. The latest YouGov poll put the “Yes” campaign on 51%, with the campaign to maintain the Union on 49%.
Small cap oil and gas explorers focusing on the North Sea haven’t had an easy time of late with sentiment firmly in the bear camp in many cases. Xcite Energy, Faroe Petroleum, Cairn Energy, Hurricane Energy, Ithaca Energy and many others would be impacted by a fight between London and Edinburgh in the case of a Yes vote in terms of who would own what in terms of a break up of oil and gas assets in the North Sea. In addition, for those based in Scotland, any potential switch from the pound would again be unsettling.
Alex Salmond and the Treasury have been arguing about the potential value of oil and gas production in British waters and although output is down in recent years as fields mature and taxes have stifled investment, billions of barrels of oil still remain to be extracted. Non conventional sources of oil like Xcite’s and Statoil’s Bentley and Bressay heavy oil fields and Hurricane’s fractured basement reservoir’s have offered the opportunity for the UK to tap into reserves which were once unaccessible.
The next week and a half will be fascinating to see how things turn out for the United Kingdom and the North Sea oil and gas industry will be holding its breath. The markets hate uncertainty and at the moment there is plenty when it comes to the future of the union.
Contrarian Investor UK
IMPORTANT: The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.