FT Energy News 24 February

February 24, 2011

Centrica signs £2bn gas deal with Qatar (Page 18)

Libya’s oil output has plunged by at least a fifth as foreign companies have shut down production, running the risk of turning the political revolt in the Middle East into an oil crisis. Opec are understood to be ready to boost production of offset any loss from Libya and for now the oil market is well supplied.

Russian oligarchs head for UK court (Page 25)

A high profile legal battle pitting Roman Abramovich against fellow Russian oligarch Boris Berezovsky can go ahead in October after a British court refused to strike out the lawsuit. Berezovsky is Abramovich for allegedly threatening and intimidating him into selling his stakes in Sibneft, the Russian oil group, and Rusal, the aluminium maker, for far less than they were reputedly worth.

Crude at 30-month peak on Libya turmoil (Page 36)

A rise in oil prices to fresh 30-month highs prompted a renewed sell-off in equities and further “flight-to-safety” buying of Treasury bonds, gold and Swiss franc as markets continued to fret about the possibility of Libyan turmoil spreading across the region.

FT Energy News 23 February

February 23, 2011

Libya chaos threatens oil crisis (Page 6)

Libya’s oil output has plunged by at least a fifth as foreign companies have shut down production, running the risk of turning the political revolt in the Middle East into an oil crisis. Opec are understood to be ready to boost production of offset any loss from Libya and for now the oil market is well supplied.

BP to offload British fields (Page 15)

BP plans to seel ageing British oil and gasfields valued at about $1bn as part of a strategy of focusing on higher-growth assets. The sale will be recycled into investments that BP believes have better prospects of future growth.

Drax raises biomass project hopes (Page 18)

Draz said it hoped government incentives would help it proceed with a £2bn biomass project later this year. The plan would see generation of power through co-firing – burning biomass from straw or other plant material alongside coal.

FT Energy News 22 February

February 22, 2011

Last man out will turn off the oil tap (Page 1)

Oil production in Libya is set to drop dramatically as leading international companies and subcontractors evacuate their staff. Crude oil prices shot up to a two-and-a-half-year high above $108 a barrel on Monday as traders braced themselves for the impact of political unrest in Libya, the first leading oil-exporting country to be hit by the political turmoil in the Middle East.

Oil groups draw up plans for swift exit (Page 7)

International oil companies said they were either cutting production or pulling out staff, while analysts said companies could face long-term problems whether the regime survived or fell. The petroleum sector is a crucial political and economic backdrop to the struggle against Colonel Gaddafi’s 41 year rule, as it accounts for almost all Libya’s export earnings.

Oil potential in Congo park pits companies against greens (Page 10)

A battle for the future of Africa’s oldest national park has erupted in the east of the Democratic Republic of Congo, pitting UK oil companies keen to explore in one of the world’s poorest countries against the green lobby. Part of a block granted to Soco International and Dominion Petroleum is in Virunga national park, a world heritage site famous for its endangered mountain gorillas. The companies, stressing the gorillas are not present in their block, are eager to start exploration in the park.

BP set for $7.2bn deal with India’s Reliance (Page 17)

BP is to make one of the biggest foreign direct investments in India, investing at least $7.2bn to take 30% stakes in 23 natural gas blocks controlled by Mukesh Ambani, the country’s richest tycoon.

India’s politics mark a risk as BP goes south (Page 19)

BP is shifting towards risky but potentially lucrative exploration in emerging economies. With disposals of mature assets in the US and the planned sale of two of its refineries there, coupled with expansion in Russia, Angola, and now India, it is clear the company’s focus is moving east and south.

Shell sells African businesses for $1bn (Page 19)

Under the terms of a $1bn deal for its downstream businesses in Africa, Shell will have a joint venture, controlling 20%, with Vitol and Helios Investment Partners, an African-focussed private equity group, owning 80%.

Exploration expertise is located after lengthy search (Page 19)

BP will take 30% stakes in 23 blocks, one of which is in production but provides 40% of Indian’s gas, giving an indication of the potential riches beneath the seabed.

Wood Group eyes benefits of industry spending (Page 19)

John Wood Group hopes an upturn in oil industry spending will boost sluggish profits.

Vitol sees 25% rise in trading volumes amid strong energy demand (Page 22)

Vitol, the largest oil trader, said trading volumes rose 25% last year compared to 2009.

FT Energy News 21 February

February 21, 2011

Centrica risks competition probe with £2bn bonanza (Page 4)

Centrica, which owns British Gas, is expected to announce pre-tax profits of £2bn for last year. Critics will point out that British Gas raised electricity and gas charges for domestic customers by 7% during the big freeze in December. Ofgem is due to conclude a “comprehensive review” of the retail energy market next month.

Oil groups rush to grab a slice of east Africa (Page 19)

East Africa used to be regarded as an oil industry backwater, a poorer relative to the continents resource-rich north and west. That’s changed over the past 12 months as majors and independents invest hundreds of millions of dollars in exploration and compete to snap up licences on the continent’s last hydrocarbon frontier.

Energees Investments takes control of regal Petroleum (Page 19)

Regal Petroleum has been taken over by one of Ukraine’s largest business conglomerates. Energees Investments, a subsidiary of one of the biggest diversified holding companies in Ukraine said it had taken control of 51.7% of Regals equity.

Boost for Brazil Inc on green efforts (Page 20)

Brazilian companies have less than half the environmental impact of emerging market peers, strengthening the case for green investment in the world’s eighth-largest economy. Brazil’s electricity mix is 10 times more efficient than the global average, opening up stocks to socially responsible investment.

FT Energy News 17 January

January 18, 2011

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 15 December

December 15, 2010

BP nearer target after $77m sale of Pakistan assets (Page 18)

BP’s asset sales this year have risen to almost $22bn after the UK oil group agreed to sell most of its exploration and production assets in Pakistan to United Energy Group for $775m.

Anadarko’s Jubilee party caps tough year (Page 23)

The Jubilee field in Ghana will produce its first oil today and will represent more than a boost in production for Anadarko Petroleum, it will validate the US independent oil group’s strategy to pursue international exploration even as its peers pulled back, it is among a handful seeking organic growth abroad. Anadarko says it expects production to rise by 7-9%, over the next five years, much of it from a string of oil discoveries off the west African coast. As 25% partner in BP’s Macondo well, Anadarko face between $5-$10bn in potential liabilities.

FT Energy News 14 December

December 15, 2010

Wood Group agrees to buy PSN for $955m (Page 22)

John Wood Group, the energy services company, will become the world’s leading brownfield production services provider after agreeing to purchase smaller rival PSN for $955m. The combined brownfields services businesses – which support mature oilfields and gasfields – will bring in about $3bn in annual revenues, according to both companies.

GE’s £800m Wellstream move reflects expansion into energy services (Page 18)

GE has agreed to buy Wellstream, the UK oil and gas services group, for about £800m as part of an aggressive expansion into energy services.

FT Energy News 13 December

December 13, 2010

Cancún seen as ‘beacon of hope’ for climate deal (Page 8)

A global agreement on climate change moved a step closer over the weekend as governments ended the UN Cancún talks with a series of accords on key elements of an overarching deal. A ‘green fund’ that will distribute money to help poor countries cope with climate change, a mechanism for international co-operation on low-carbon technology, and a way to help developing nations preserve their forests all emerged from the two weeks in negotiations in Mexico.

Regal board urges £77m sale (Page 18)

The board of Regal Petroleum has recommended a 24p per share cash offer by Energees Management Limited, a subsidiary of one of the biggest holding companies in the Ukraine. The bid values the oil and gas group at £77 and represents a 62% premium on the company’s average closing share price in November.

China taps into Argentina’s oil prospects (Page 20)

Chinese oil companies have spent more than $15bn in upstream deals in Latin-America. The shift toward the region is happening partly because China’s oil groups are increasingly confident of competing against their western peers in mergers and acquisitions.

FT Energy News 9 December

December 9, 2010

Green deal needs better incentives, says industry (Page 4)

Business and consumer groups have cast doubts over government claims that its flagship policy o insulate Britain’s homes will lead to a green revolution, saying that more incentives will be needed to help meet tough emissions targets. The “green deal” will encourage consumers and businesses to make their premises more energy efficient at no upfront cost. Instead, they will pay through a charge on their energy bill that is intended to be less than the savings made by the improvements.

U-turn fuels fears over higher bills (Page 4)

A Conservative pledge to require gas companies to guarantee supplies will not be included in the energy bill. The Tories had promised to force suppliers to guarantee gas provision even in an emergency but the government is now planning to merely ask them to pay a market price for such supplies, even if a squeeze on supplies has sent that price soaring.

Energy jobs in peril as grants expire (Page 6)

Renewable energy industries in the US face the prospect of falling off “a market cliff” if investment grants for projects such as wind farms are not extended by Congress.

FT Energy News 8 December

December 8, 2010

Energy bill increases fail to fund new power capacity (Page 4)

Higher energy bills that British consumers will begin paying this month have nothing to do with funding new generating capacity, according to leading gas and electricity groups, saying that the UK will lose about 30% of its generating capacity by 2020.