First oil

What a difference one election can make. Back on July 24, Conservative MP Boris Johnson took over as British prime minister from Theresa May, only to find himself embroiled in the same Brexit mess that had plagued Parliament for months. Looking to break the logjam and gain a clear mandate, Johnson called a snap (early) election for Dec. 12, 2019. In the weeks leading up to the election, British pollsters and media consistently showed the Conservatives ahead, albeit not predicting a huge win.

But as early returns filtered in, a landslide Conservative victory became obvious. The Tories smashed through a number of Labour strongholds, enroute to a 48-seat pick-up for a  365-seat total, resulting in an astonishing 80-seat majority. It was the Conservatives’ greatest victory since 1987, when former P.M. Maggie Thatcher swept to a 102-seat majority. Conversely, Labour suffered their worst defeat since the general election of 1935. 

The big win gives Johnson a mandate to finish the Brexit process. As this issue went to press, Johnson already had pushed his fellow Tories to vote through the so-called Brexit Bill, so that the UK could leave the E.U. by Jan. 31, 2020.

Commenting on the election results, OGUK Chief Executive Deirdre Michie said, “We look forward to continuing our constructive working with the Prime Minister and the UK government, as we work to ensure a safe and competitive industry, which realises a successful future through the energy transition and a Sector Deal. We welcome all the new members of Parliament and thank outgoing members for their support for this critical industry.

“As we go into the new year,” continued Michie, “our priority will be to ensure and reinforce recognition of the positive role our industry is playing in helping to achieve net zero emissions alongside providing a major economic contribution and a big part of our energy security.”

Leviathan dodges last-minute hurdle. Noble Energy commenced gas production on Dec. 31 from Leviathan field, offshore Israel in the eastern Mediterranean. The project has been exemplary in terms of efficiencies, with first gas going onstream less than three years from project sanction and capital expenditures $150 million under budget. The first phase of four wells produces through two 18-in., 73-mi subsea tiebacks to a processing platform offshore Israel.

Leviathan’s start-up had a last-minute hurdle. On Dec. 17, the Jerusalem District Court issued a temporary injunction, suspending trial operations at Leviathan over environmental concerns. The petition was brought by several municipalities and an environmental group against Noble and Israel’s Environmental Protection Ministry. Fortunately, the suspension only lasted two days. On Dec. 19, the same court rescinded the injunction, saying that the appellants had not provided sufficient evidence that Leviathan’s emissions, during the start-up phase, would prove dangerous.

A rising economic tide floats nearly all U.S. wage-earners. Since taking office three years ago, the Trump administration has championed its economic policies as improving the financial status of most all U.S. demographic groups. Up until recently, and despite failing to show any credible numbers, President Trump’s detractors had insisted that his policies were only benefitting the wealthy. Now, thanks to Federal Reserve Bank of Atlanta data, it appears that Trump is actually closing “the wealth gap,” at least a little. In a year-on-year comparison of November 2019 data and November 2018 data, upper-income workers experienced 2.9% wage growth, while lower-income workers saw a far-faster 4.5% growth rate.

Of course, what isn’t mentioned is that oil-and-gas workers are probably seeing no wage growth at all, given market conditions. Yet, one of the Trump economy’s underpinnings has been the upstream industry and its oil production growth. Someone should point this out, but it won’t be the national media.

About the Authors

Kurt Abraham

World Oil

Kurt Abraham kurt.abraham@worldoil.com