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.