Following the outcome of Thursday’s referendum on Britain’s membership of the European Union, Offshore Energy Today has reached out to European oil companies seeking their comments on the exit vote.
According to Reuters, world financial markets plunged as complete results showed a near 52-48 percent split in favor of leaving the EU.
Oil prices dropped by more than 6 percent on Friday after the results emerged showing that Britain had voted to leave the European Union.
In an effort to find out what Brexit, an abbreviation of “British exit”, means for the oil market and European oil majors, Offshore Energy Today has contacted oil giant Royal Dutch Shell.
A Shell spokesman said: “Although Shell was in favour of the UK remaining in the EU, we respect the decision of the majority of the British people who voted to elect to leave.
The company’s spokesperson also added: “We will work with the UK government and European institutions on any implications for us. Our priority is to continue providing reliable, affordable energy to our customers in Europe and the UK.”
BP: Too early to understand
Offshore Energy Today also contacted British oil major BP for a comment, and this is what the company said:
“We respect the decision taken by the British electorate in the EU referendum. It is far too early to understand the detailed implications of this decision and uncertainty is never helpful for a business such as ours.
However, we do not currently expect it to have a significant impact on BP’s business or investments in the UK and Continental Europe, nor on the location of our HQ or our staff,” BP said in a statement sent to Offshore Energy Today.
“As details of the process for negotiations around the UK’s future relationship with the EU become clear, we expect to engage with both the UK government and the EU on areas of common interest,” BP said.
A spokesperson for the UK North Sea oil and gas operator EnQuest said the company was not making a statement on the referendum. A spokesperson for Premier Oil said the company had no comment on the matter “at this time”.
Number of implications
Prior to the referendum, Douglas-Westwood, an energy intelligence group, analyzed what withdrawal of the United Kingdom from the European Union could mean for the UK oil & gas industry.
DW claimed there would undoubtedly be a number of “Brexit” implications for UK oil & gas, but that the current low oil price environment was likely to play a far larger role in shaping the form and structure of the UK energy industry over the coming years. The energy intelligence group concluded the future of the UKCS would be largely decided by oil price.
Ian Powell, Chairman and Senior Partner of PricewaterhouseCoopers (PwC), a multinational professional services network headquartered in London, said regarding the UK’s decision to leave the EU: “The UK’s decision to leave the EU will have significant implications for businesses and we are already working with our clients and people to support them as those implications are understood.
Powell also added: “There will be significant uncertainty over the coming months as the detailed political and legal issues are worked out, and business confidence may be impacted.”
‘Leap into the unknown’
Andrew Sentance, senior economic adviser at PwC, commented: “The UK leaving the EU is potentially a big leap into the unknown, disrupting trade relationships with our most important and nearest trading partner and creating uncertainty for financial markets and business in general.”
Sentance added: “It is important to keep things in perspective, but in the short-term, we need to brace ourselves for more volatility. The final polls yesterday were pointing to Remain and this was the general expectation of financial markets. This potential shock could hit the pound and stock markets badly, and push up the cost of borrowing because of the additional political risk.
“There is also the possibility of political fall-out as this decision has gone against the government’s stated policy of Remain. It is difficult to see how that will play out but it will add to the climate of uncertainty.”
Prime Minister Cameron resigns
According to BBC, UK Prime Minister David Cameron has resigned after Britain voted to leave the EU, and said there should be a new PM in October.
Cameron made a statement in Downing Street on the outcome of the referendum on the UK’s membership of the European Union.
“The British people have voted to leave the European Union and their will must be respected,” he said.
I do not think it would be right for me to try to be the captain that steers our country to its next destination.
Cameron also said: “We must now prepare for a negotiation with the European Union. This will need to involve the full engagement of the Scottish, Welsh and Northern Ireland governments to ensure that the interests of all parts of our United Kingdom are protected and advanced.”
The Prime Minister further added: “I will do everything I can as Prime Minister to steady the ship over the coming weeks and months, but I do not think it would be right for me to try to be the captain that steers our country to its next destination.
“This is not a decision I have taken lightly, but I do believe it is in the national interest to have a period of stability and then the new leadership required.
“There is no need for a precise timetable today, but in my view we should aim to have a new Prime Minister in place by the start of the Conservative party conference in October.”
Offshore Energy Today Staff