Oil and gas editorial: a kingdom divided

Tim Haïdar

"True, This! —
Beneath the rule of men entirely great
The pen is mightier than the sword. Behold
The arch-enchanters wand! — itself is nothing! —
But taking sorcery from the master-hand
To paralyse the Cæsars, and to strike
The loud earth breathless! — Take away the sword —
States can be saved without it."

Act II, scene II, "Richelieu; Or The Conspiracy" by Edward Bulwer-Lytton (1803 - 1873)

A few weeks ago, the shadow of Brexit - the United Kingdom's withdrawal from the European Union - was just that, an obscurity, intangible and illusory. Today, the genie is out of the bottle and whether the magic cast is white or black will be felt over a span of years.

The snap rejection of a long-established status quo will always be met with a proportionally-sharp shock in the confidence of a nation's finances. Markets are neurotic, speculators hair-triggerish. The pound dived like a swimmer into an Olympic-sized pool of doubt.

Those who voted "Leave" the next day experienced "buyer's regret", having purchased an item of undefined shape, size, quality and durability. Some likened it to going on a blind date and finding the person waiting for you at the restaurant was an ex-spouse. Either way, the plunge has been taken and you've already paid for the taxi to the bistro; whether you will be compelled to swim or to wait for the aperitif to arrive remains in the balance, guided by the hand of the public like some subaquatic, sub-romantic Truman Show.

As we signalled before the vote in our most viewed analysis of the year so far, there will be some trenchant and long-term consequences for the oil and gas industry of these isles as the negotiation of an Article 50 exit evolves in the coming 24 months.

The most striking of these ramifications may be that by the time Britain's formal exit is ratified, the United Kingdom may be the "Untied Kingdom", with the knots that have bound Scotland and England from more than three centuries unwound and unbraided.

The loud Earth holds its breath, but whether a state is saved or has been rent by the might of the pen is now beyond the master-hand...