Time for a sharp Brexit? Energy firms will go with flow after referendum

Decc scrapped: Pictured former Secretary of Energy and Climate Change Amber Rudd (centre)
Dave Wink (SGP Manager) showing SoS Energy Amber Rudd and Total Chairman and CEO Patrick Pouyanne the new Shetland Gas Plant.

International oil companies are largely non-committal when it comes to the internal politics of nation states in which they operate.

Gobal corporations are generally in favour of stability and status quo.

The 2014 Scottish referendum did reveal some preferences, BP’s Bob Dudley expressed his desire for a No vote, and Sir Ian Wood famously spoke in favour of remaining part of the UK, exclusively to Energy Voice.

A recent survey by law firm Bond Dickinson revealed a majority of the 126 companies which responded to the survey were unperturbed – or perhaps disinterested – about the looming in-out vote on the UK’s continued membership of the European Union.

Bond Dickinson oil and gas partner Uisdean Vass says: “One thing about which the majority of the industry is united is the impact of the European referendum. Most are unfazed at the outcome.

“Just as with the Scottish independence referendum, operators and contractors have shown they believe constitutional matters have little impact on their businesses.”

Nearly half (45%) of the firms surveyed said it was difficult to reach a decision on the impact of the UK leaving, should that happen in June.

One in five (20%) said a Brexit would make little difference to the industry, 27% warned it would be unhelpful and 8% believed it would be a “positive” move.

For Brexit – both sides have been keen to roll out their supporters from the business community. Leave has support from Sir James Dyson, maker of stylish vacuum cleaners and other consumer devices and the chairman of Weatherspoons pubs – Tim Martin.

Remain has a veritable cue of multinationals lining up to back remain.

BP’s Bob Dudley said last week that Brexit wouldn’t change exactly what BP does, adding: “(But) my personal concern is the unintended consequences – no one is quite sure what will happen.

“I’m sure the pound will gyrate a bit. I think it will put the world into some period of uncertainty … including for Britain. So, I’m concerned about that,” he said.

A Brexit vote would hit the entire European economy and have a “significant impact on confidence”, according to credit agency Moody’s in its latest warning over the EU referendum.

Total chief executive Patrick Pouyanne says UK should stay in the EU. However, the company chief said if the UK decided to leave the EU, it would have “no impact” on the energy giant’s commitment to build on its presence in the country.

In February, the AA warned petrol prices may rise by as much as 18.7 pence per litre following a Brexit vote in the upcoming referendum.

The UK’s renewable energy industry could be harmed by Brexit with the loss of incentives to develop a low-carbon economy, legal experts have warned in March.

Pinsent Masons said a vote to leave Europe could remove legally binding carbon-free targets, which in turn could dilute the political will to deliver green power.

The chief executive of French energy giant EDF said its multibillion-pound plans for a new nuclear power station at Hinkley Point would not be affected if the UK votes to leave the EU.

Vincent de Rivaz said Hinkley was needed for the country, the policy of decarbonisation, the policy for securing supply … the policy of partnership with France, with China.

“All these elements are not dependent, in my view, on the result of the EU referendum.”

Even the UK Government ministers responsible for overseeing the department for energy and climate change are opposite sides. Energy secretary Amber Rudd, a member of the cabinet, has backed remain while Energy Minister Andrea Leadsom has sided with fellow Tory MPs Boris Johnson and Michael Gove in the leave camp.

Whatever happens in Thursday’s vote, come Friday executives around the world will react calmly and continue taking care of business.