EnQuest plc SWOT & PESTLE ANALYSIS

Strength

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Weakness

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Opportunity

1. Explore renewable energy opportunities to complement its existing oil & gas operations: EnQuest has recognized the importance of renewable energy sources and is actively exploring opportunities to complement its existing oil and gas operations with renewable energy. The company aims to transition towards a lower-carbon future and contribute to the global efforts to combat climate change. It is exploring offshore wind and energy storage technologies, which it believes have the potential to offer significant opportunities for its business. The company has identified areas in the North Sea where it can leverage its existing infrastructure and expertise to develop floating offshore wind projects. It is also evaluating the use of energy storage solutions, such as batteries and hydrogen, to improve the efficiency and flexibility of its offshore operations. It is working with partners and suppliers to develop a roadmap for the transition towards a lower-carbon future. The company recognizes the need to balance its transition towards renewable energy with its existing oil and gas operations, and it aims to achieve this through a phased approach, focused on reducing emissions and increasing efficiency in its operations.

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Threat

1. Risk of environmental incidents such as oil spills: EnQuest is committed to minimize environment related risks and has implemented a range of measures to prevent and respond to spills. It has a rigorous safety and environmental management system in place, which includes procedures and training for spill prevention, detection, and response. The company conducts regular risk assessments and emergency drills to ensure that its staff is well-prepared to respond to spills. It also employs various technologies to detect and respond to spills, including automatic monitoring systems, remote-controlled vehicles, and response vessels. The company has developed spill response plans for each of its installations, which are regularly reviewed and updated to reflect changes in its operations and the surrounding environment. Its commitment to spill prevention and response is a critical component of its broader sustainability and environmental management strategy. Environmental incidents can have significant impacts on local ecosystems and communities and preventing spills is essential to maintaining its social license to operate.

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Political

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Economic

1. Imposition of UK Energy Profits Levy (EPL) increase tax burden: The UK government's Energy Profits Levy (EPL) is an additional tax on profits for energy companies, which has been increasing in recent years. The EPL was introduced in 2011 and was initially set at 20%, but it has since been increased to 25%, with plans to increase it further to 30% by 2023. This increase in tax burden can impact oil & gas companies operating in the UK. Businesses have increased tax liability, which has resulted in a higher effective tax rate. It is also challenging for the company to compete with other global energy companies that operate in lower tax regimes. The company has taken steps to mitigate the impact of the EPL on its operations, including reducing costs and optimizing its capital expenditure. It has also diversified its portfolio to include renewable energy opportunities, which could potentially offset the impact of the EPL on its financial performance.

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Social

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Technological

1. Robots' increasing significance enhances resilience and safety for workers: Robots are becoming increasingly important in the oil and gas industry, with companies using them to improve operational efficiency, reduce costs, and enhance safety for workers. One of the main advantages of robots is that they can operate in dangerous or hard-to-reach areas that are not safe for humans. The use of robots has become more prevalent due to the COVID-19 pandemic, which has made it more difficult for workers to operate in close proximity to each other. It helps in enhancing operational efficiency, with robots being able to complete tasks faster and more accurately than humans. Additionally, robots can operate in harsh environments, such as deep-sea drilling operations, where they can perform tasks that would be impossible for humans to complete. Overall, the increasing significance of robots in the oil and gas industry is likely to have a positive impact on business operations in the industry, enhancing its resilience and improving the safety of its workers.

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Legal

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Environmental

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