Oil stocks to watch as govt to examine extending windfall tax - Kalkine Media

October 27, 2022 12:42 PM BST | By Abhishek Sharma
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  • The PM and Chancellor may consider extending windfall tax to plug the black hole worth billions of pounds in the country's public finances.
  • Rishi Sunak had announced a windfall tax on oil and gas producers earlier this year when he was the Chancellor.

Just days after taking up the top job, PM Rishi Sunak has swung into action to find money to fund the government debt. According to news reports, the PM and Chancellor Jeremy Hunt will examine extending the windfall tax on oil and gas giants.

The oil and gas companies have generated huge profits this year due to the soaring energy prices, especially after the Russia-Ukraine war, which led to supply chain disruptions.

The report by the Evening Standard cited Conservative Party chairman Nadhim Zahawi stressing that the PM and the Chancellor would consider an extended windfall tax as part of their strategy to plug a blackhole worth tens of billions of pounds in the country's public finances.

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It may be recalled that Sunak had announced a windfall tax on oil and gas producers earlier this year when he was the Chancellor. It was raising about £5 billion for the government.

Terming it a "tough decision", Zahawi said that the Chancellor and the PM would be looking at everything regarding managing the public finances.

Notably, the government's full Autumn statement detailing its tax and spending plans will be presented on 17 November.

Let's explore a few London-listed oil and gas stocks amid talks of extending the windfall tax.

Shell plc (LON: SHEL)

With a market cap of £163,736.13 million as of 27 October, the FTSE-listed Shell plc recorded profits of £8 billion in Q3 of the year. In the previous quarter, this profit stood at £9.84 billion. So far this year, the company has reported profits worth £25 billion, which is twice the amount it made in the same period last year. Shell's share price has jumped by over a third in the past 12 months, and by more than 46% yearly.

BP plc (LON: BP.)

Another London-listed oil and gas supermajor is BP Plc, with a market cap of £85,829.94 million and an EPS of 0.38. In the past 12 months, BP's share price has jumped over 32%, while the YTD return is currently at 43.75%.

Harbour Energy plc (LON: HBR)

The FTSE 100-listed North Sea operator has a market cap of £3,302.22 million and an EPS of 0.12. As of 26 October, the stock price has increased by 6.42%, while on a YTD basis, it has jumped by 9.72%. Its turnover (on book) is currently at £1,797,934.34.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated, taking into consideration the associated risks.


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