FT Energy News 17 January

Backlash over BP deal with Rosneft (Page 1)

BP’s landmark deal with Rosneft, the Russian state oil company, was last night facing a backlash from AAR, the consortium through which the stakeholders hold their stake in TNK-BP, said it was examining whether the deal breaches their agreement, which stipulates that BP can only pursue new opportunities in Russia via the venture. BP’s $16bn share swap with Rosneft, which will see the Kremlin indirectly become the single largest shareholder in the UK group, already faces scrutiny in the US where the company is a major supplier of fuel to the military.

Deal creates new model for BP growth (Page 19)

Under the terms of the deal, Rosneft will take a 5% stake in BP, BP will see its holdings in Rosneft rise to 10.8% and will gain access to an area in Kara Sea off the Siberian coast, that is roughly the size of the North Sea and potentially as prospective.

Billionaire partners in TNK-BP examine deal (Page 19)

BP’s billionaire partner in TNK-BP have protested over the group’s tie-up with Rosneft, saying it potentially represents a breach of the oligarch’s shareholder agreement with BP.

Russian deputy PM delivers on connecting with the West (Page 19)

Friday’s deal not only grants Rosneft much needed access to BP’s technology and expertise in off-shore development, it also makes the Kremlin the single biggest shareholder in an international oil group for the first time.

Innovation in Energy

Global deal on climate change will be the key (Page 1)

Research found that in the first six months of 2010 new investment in clean energy totalled $65bn, some 22% up on the same period of 2009. Initial estimates for total new clean energy investment for 2010 predicted $180-$200bn.

Uneven incentives hamper growth – Renewables in the US (Page 2)

The uncertainty about long term US legislative support for renewables is undermining the growth of the industry. Programmes are only in place for the short term, generally one to three years and then Congress must vote to extend them.

Producers eye export in weak domestic market – Natural Gas in the US (Page 2)

Sale discoveries may prove important for energy security but demand is static for now. Gas producers are trying to build a market by encouraging the use of natural gas as a transportation fuel for vehicle fleets. This will involve building an infrastructure to support this. Policymakers are increasingly recognising the potential of gas supply, which can be used both as a transportation fuel and to power utilities charging electric vehicles but they are nervous about committing to gas for fear it is not as abundant as producers claim.

Very small reactors will need huge sales effort – Mini Nuclear (Page 2)

Mini nuclear reactors 10-300MW in size are only years away from operation. The cost of a conventional reactor, €6.5bn, is 130 times greater than a mini-reactor to produce 64 times more electricity.

Capture technology faces a more hostile environment (Page 3)

Carbon capture and storage will only proceed when the price of carbon is high enough to incentivise companies to capture and store.

Barrages need brave policies and investors – UK tidal power (Page 3)

Tidal power generation provides a predictable and consistent source of energy, it can be relied on to produce a given level of electricity at a specified time. The 1.2MW facility in Strangford Lough produces electricity for 1,000 homes. Tidal facilities with a lifetime of 120 years would need to operate for 30-40 years to cover the total construction costs.

Holy grail of the renewables industry – Electricity storage (Page 4)

Energy storage can play a key role in overcoming the intermittency of renewables. Some of the ideas for storing energy include pumped storage, using fuel cells and harnessing the power of fleets of electric vehicles.

FT Energy News 6 January

US pins blame for BP spill (Page 1)

Systematic failures by the management of BP and other companies led to the Macondo well blow-out in the Gulf of Mexico last year, the official US inquiry has concluded, warning that industry complacency could cause a similar accident again. The report will be published on Tuesday and delivers a scathing verdict on the procedures followed by BP and its contractors on the project, Halliburton and Transocean.

Spill fears fail to bring curb on deepwater oil drilling (Page 2)

MPs will today rule out a moratorium on deepwater drilling in the North Sea but urge oil and gas companies to address shortcomings in their response plans to spills. A report by the Commons energy and climate change committee calls on the government to ensure that standardised response plans are replaced by site-specific guidelines that take into account local conditions.

China keeps turbines turning as European cuts affect demand (Page 23)

Government budget cuts will slow growth in the European wind power industry this year, but surging demand from China is helping advance the global push behind green energy according to Vestas Wind Systems, the world’s biggest wind turbine maker. Growth in new wind energy installations in Europe is forecast to shrink from 14% in 2010 to 1% this year, according to analysts at Citigroup.

FT Energy News 5 January

Oil price ‘enters danger zone’ (Page 1)

High oil prices threaten to derail the fragile economic recovery among developed nations in the Organisation for Economic Co-operation and Development according to the IEA oil import costs have soared by $200bn to $790bn to the end of 2010.

US oil groups press for easing of drilling curbs (Page 7)

The US oil industry has launched a campaign to persuade the government to open more of the country’s coastline and interior for oil and gas drilling, arguing that ending restrictions could create more than 500,000 jobs. The American Petroleum Institute believes that the November elections in which the Republicans won control of the house of representatives will lead to a better reception from Congress to its appeal for increased drilling access.

BP hits seven-month high on Gulf compensation news (Page 17)

BP shared jumped 7% after news that its compensation payouts for the Gulf of Mexico spill might be much lower than anticipated.

Cairn hires rigs for Arctic oil search (Page 20)

Cairn Energy’s highly prospective Arctic exploration programme remains on track after they said they have rented two drilling rigs and secured a $900m credit line. The operator said that it had plans to drill up to four wells this year, subject to approval from the country’s government.

Latest Falklands setback knocks Desire shares (Page 20)

Shares in Desire Petroleum, the Aim-quoted oil explorer, fell by almost a quarter after it announced that no oil had been found in a prospective well off the Falkland Islands. Desire has now drilled four wells in the North Falklands Basin without finding oil and said it had funds to drill one more.

South Atlantic yields more frustration (Page 20)

The admission that Desire Petroleum is considering to raise more cash to bolster its faltering Falklands drilling campaign raises fresh questions about the prospects of companies drilling there.

Petrobras in talks over Eni’s Galp stake (Page 22)

Petrobras, Brazil’s national oil company, is in talks with Eni, the Italian energy group, to acquire its 33% stake in Galp, the Portuguese oil company. Galp is a partner with the Brazilian group in exploration and production in off-shore fields, including the potentially enormous “pre-salt” discoveries of 2007. Petrobras is already engaged in one of the most ambitious investment programmes in the industry.