The FTSE 100 ended the day in positive territory on Thursday as strong results from Royal Dutch Shell and Diageo helped investors look past wider economic headwinds.
London’s premier index closed up 27.22 points, or 0.39%, at 6,968.85.
Gains came despite worrying news from the continent, with Italy falling into recession and more rumours that troubled Deutsche Bank and Commerzbank will merge.
Connor Campbell, financial analyst at SpreadEx, said: “The UK index continued to lurk near 7,000 without being able to break through that key level.
“Though the macro-mood may have weakened, especially when compared to the sizeable growth seen soon after the bell, the FTSE was propped up by some key earnings.”
Diageo was the biggest riser on the FTSE 100 after the drinks giant said it would buy back an extra £660 million of shares from investors.
Figures for the first half of the financial year show that British consumers continued to lap up top drinks brands, with overall sales in the UK up 14% in the six months to December 31.
Underlying profit was 12% higher at £2.45 billion. Shares touched record highs and ended 129.5p up at 2,901.5p.
Shares in Royal Dutch Shell were on a tear after the blue chip firm revealed its biggest profit haul for four years after earnings surged 36% thanks to higher oil and gas prices.
The oil major posted underlying earnings of 21.4 billion US dollars (£16.3 billion) for 2018.
Its fourth-quarter profits rose 32% to 5.7 billion US dollars (£4.3 billion) despite more recent falls in the cost of crude, with higher gas prices also boosting the result.
The company’s A shares closed 86p higher at 2,362p while its B shares ended up 83p at 2,368.5p.
Meanwhile, BT shares ended in the red as the firm warned that a disorderly Brexit could hit business and consumer confidence, even as it posted a double-digit increase in profits.
The telecoms giant said it has prepared for a possible no-deal Brexit and that its contingency planning has been focused on ensuring it can “provide uninterrupted service to our customers, including sufficient inventory to protect against potential import delays”.
Shares closed down 1.6p at 232.4p.
The pound was trading 0.1% higher versus the US dollar at 1.313 and was 0.3% up against the euro at 1.146.
Michael Brown, senior analyst at Caxton FX, said: “Sterling is unlikely to significantly extend its gains in the coming weeks unless official confirmation of an extension to Article 50 emerges and as the political uncertainty continues.
“Overall, it is likely that the pound will begin to drift lower ahead of the second ‘meaningful vote’ if the current stalemate continues with a reversal of this month’s gains becoming more likely.”
In Europe, Germany’s DAX fell 0.08% and France’s CAC was up 0.36%.
A barrel of Brent Crude was trading at 62 US dollars, a rise of 10.3%.
The biggest risers on the FTSE 100 were Diageo up 129.5p at 2,901.5p, Antofagasta up 37.2p at 869.8p, Royal Dutch Shell B up 26p at 2,362p and Royal Dutch Shell A up 83p at 2,368.5p.
The biggest fallers on the FTSE 100 were Smurfit Kappa down 120p at 2,202p, Standard Life Aberdeen down 13.4p at 251.65p, Tui down 40.5p at 1,154p and DS Smith down 10.9p at 337.2p.
Despite a dramatic drop in crude oil prices during the fourth quarter, Houston oil field service company Baker Hughes, a GE company (BHGE) closed 2018 with a $195 million profit.
BHGE posted a $131 million profit on nearly $ 6.9 billion of revenue during the fourth quarter. The fourth quarter figures translated into earnings per share of 28 cents.
The service giant finished 2018 with a $195 million profit on $22.9 billion of revenue. The annual figures translated into earnings per share of 46 cents.
The company’s fourth quarter figures beat analyst expectations for earnings per share by a penny and beat revenue expectations by $6.9 billion.
The end-of-year results mark the first full year of earnings for BHGE following a July 2017 merger with the oil and natural gas division of General Electric.
Crude oil prices dropped by 40 percent during the fourth quarter causing pain for oil field service companies but the price of domestically produced West Texas Intermediate crude oil has since bounced back to the $54 per barrel range.
“As we look forward to 2019, our core mission as a company is unchanged — delivering productivity solutions to the oil and gas industry through differentiated technology and innovative commercial models,” CEO Lorenzo Simonelli said in a statement. “We are positioning the company to navigate a dynamic macroeconomic environment, while remaining focused on delivering for our customers and on our priorities of share, margins, and cash.”
With a history going back to 1907, BHGE now employs more than 64,000 people in 120 nations.
A new tidal erosion technology could save the average big wind project up to £8.6 million over its lifetime.
A £1m project has been announced today to develop a new scour protection system designed to protect wind turbine foundations from tidal wear and tear.
A consortium of firms, including the Offshore Renewable Energy (ORE) Catapult, ScottishPower Renewables, N-Sea, SPT Offshore and Great Yarmouth’s Seabed Scour Control Systems (SSCS), will undertake a 20-month project to ascertain the feasibility of the technology.
The field testing will take place at ScottishPower Renewables’ East Anglia ONE offshore windfarm before innovation centre ORE Catapult analyses the overall performance over twelve months.
Adam Tucker, subsea division manager at SCSS Ltd, said: “By pre-installing the scour protection system onshore and deploying at the same time as the foundation installation, this innovation will remove the need for environmentally damaging quarrying of rocks and diesel intensive installation vessels whilst providing a lower cost alternative to those currently available for the protection of offshore wind structures.”
ORE Catapult’s financial analyst Miriam Noonan added: “Installation costs typically account for over 75% of the overall cost associated with scour protection systems.
“By being able to deploy SSCS Frond Mats at the same time as the wind turbine foundation installation, the associated installation costs may be significantly reduced.”
Danish wind giant Orsted has announced it saw healthy £700 million profit growth in Q4 2018.
The wind developer has released results showing £1.7 billion pre-tax profit in Q4 2018, compared to £1bn in Q4 2017.
However, Orsted did experience a small dip in overall profit with a £149m shortfall between year end 2018 and the end of the previous year.
The Danish wind firm commissioned a number of high profile UK projects last year, including Race Bank and Walney Extension, the world’s largest offshore wind farm.
In Germany, Orsted commissioned Borkum Riffgrund 2 in December.
Chief executive and president Henrik Poulsen said: “2018 was a great year for Orsted. We delivered our best financial result ever and continued our deployment of green energy, reaching 75% green energy in our heat and power generation.
“On a global scale, renewable energy will grow rapidly in the years to come. We are well positioned to take part in this significant growth.
“By the end of 2018, our portfolio consisted of 12 gigawatts (GW) of offshore and onshore wind farms and biomass-fired combined heat and power plants that are either in production, under construction or have obtained final investment decision (FID).
“Furthermore, we have projects with a capacity of 4.8GW for which we have been awarded the construction concessions or entered into offtake agreements, but are yet to make FID. In addition, we have a strong pipeline of projects under development.
“Towards 2030, it is our strategic ambition to reach an installed capacity of more than 30GW renewable energy, provided that the build-out creates value for our shareholders.
“Contributing to this ambition, we raised our 2025 ambition for offshore wind from 11-12GW to 15GW.”
Shell’s boss said today that the energy giant had “delivered on its promises” for 2018 after completing its divestment programme and keeping a lid on capital investment.
Chief executive Ben van Beurden added that the Anglo-Dutch firm’s strategy to build a “world-class investment case” was working.
The oil major recorded CCS earnings attributable to shareholders excluding identified items of £16.3 billion in 2018, up 36% year-on-year.
And it chalked up income attributable to shareholders of £17.7 billion, 80% more than in 2017.
Revenues jumped 27% to £295bn, while pre-tax profits came to £27bn, nearly double 2017’s total.
Shell said it had benefited from higher oil, gas and LNG prices over the course of 2018.
David Barclay, head of office at Brewin Dolphin Aberdeen, described the outcome as a “strong set of results in volatile times”.
To balance the books following its acquisition of BG Group, Shell set itself a target of divesting £23bn ($30bn) worth of assets from 2016-18.
That process, which included the sale of £3bn worth of North Sea fields to Chrysaor, has been completed.
The company is also in the process of buying back at least £19bn of its shares by the end of 2020.
When crude prices were low, Shell paid dividends in the form of additional shares, rather than cash.
But with market conditions improving, Shell said in November 2017 that it would cancel its scrip dividend programme and start repurchasing shares.
The company has completed the first and second tranches of its share buyback programme, which resulted in the acquisition of shares worth £3.4bn.
Shell today announced the launch of the third tranche.
Capital expenditure totalled £17bn in 2018, compared to £15.8bn a year earlier.
In the upstream segment, production dropped 2% to 2.7 million barrels of oil per day, mainly due to asset sales and natural field decline. New start-ups and improved field performances prevented the figure from slipping any further.
Shell made a number of final investment decisions (FIDs) as operator in the UK continental shelf last year.
It committed to redeveloping the Penguins field in the northern North Sea last January, followed by FIDs on the Fram project in June, and Arran in October.
The company also has a 50% stake in the BP-operated Alligin project, which got the all-clear in April.
Mr van Beurden said: “Shell delivered a very strong financial performance in 2018, with cash flow from operations of £37.7bn, excluding working capital movements.
“We delivered on our promises for the year, including the completion of the £23bn divestment programme and starting up key growth projects while maintaining discipline on capital investment.
“We paid our entire dividend in cash, further reduced our debt and launched our share buyback programme, with £3.4bn in shares repurchased so far.
“We will continue with a strong delivery focus in 2019, with a disciplined approach to capital investment and growing both our cash flow and returns.”
Mr Barclay said: “Shell nearly doubled its income in 2018 – up 80% on the previous year.
“However, to date, the company has underperformed on a rolling 12-month view: marginally against the oil price and FTSE100, and more than 10% against BP.
“Part of that can be put down to gearing sitting above its 20% target, which investors will be pleased to see has reduced from 25% in 2017 to 20.3%.
“They will also welcome the launch of the next tranche of its share buy-back programme, about which many investors were on tenterhooks for updates.
“While Shell’s stock fell by 17.5% in Q4 of 2018 against a backdrop of global macro uncertainty and an unpredictable oil price, this is a strong set of results for the company in volatile times.”
Australian firm Talon Petroleum has struck a deal to buy EnCounter Oil, more than doubling the size of its North Sea portfolio.
The acquisition will give Talon 100% interests in two “high-quality” exploration opportunities, as well as the services of two experienced North Sea explorers.
Talon’s first North Sea acquisition came in October, when it purchased a 10% stake in the Curlew-A discovery from Corallian Energy.
Curlew-A is thought to contain 45 million barrels of oil equivalent (boe). An appraisal well is slated for the third quarter of 2019.
EnCounter Oil, based in Hertfordshire, was set up by former members of EnCore Oil, which was involved in discovering the Breagh and Catcher fields. Premier Oil bought EnCore in 2011 for £221 million.
EnCounter’s portfolio includes the wholly-owned Skymoos prospect, which could hold more than 100m boe and is located in the outer Moray Firth near Equinor’s Verbier discovery.
It also owns the 27m barrel Rocket prospect, which lies in the Central Graben Area, near Catcher.
Talon is ready to look for farm-out partners to help it develop both prospects.
EnCounter directors Graham Dore and Paul Young will join the team at Talon, which is headquartered in Newcastle, New South Wales.
Mr Dore will become a non-executive director once the deal goes through.
In a complex transaction, Talon has agreed to buy 100% of EnCounter’s issued share capital in exchange for 100m Talon shares. A further 300m Talon shares will be transferred if certain milestones are met in relation to the farming out and drilling of Skymoos and Rocket. EnCounter shareholders could end up with 19% of the capital of Talon.
Talon managing director Matthew Worner said: “The transaction with EnCounter Oil is a significant step forward in our UK North Sea strategy. We are extremely pleased to be executing this deal with EnCounter Oil, with the company acquiring both the highly-prospective Skymoos and Rocket prospects.
“We are also pleased to welcome both Graham Doré and Paul Young, two highly experienced oil and gas executives, who bring outstanding UK North Sea experience, and will play a pivotal role in Talon delivering long-term shareholder value from its growing North Sea portfolio.
“We set about our strategy to assemble a compelling portfolio of UK North Sea opportunities only six months ago. To have brought in three exciting and highly prospective assets in such a relatively short period of time is a particularly pleasing outcome, and Talon will continue to build on this during the year.”
North Sea acreage containing up to 300 million barrels of oil has been put up for grabs.
The 31st supplementary bidding round – launched today − specifically focuses on unlicensed blocks in the Greater Buchan Area (GBA) in the outer Moray Firth.
The Oil and Gas Authority (OGA) is using the auction as a “vehicle” to develop an “area plan” with industry for GBA.
Area plans have been used to good effect in the North Sea, particularly around the Shearwater platform in the central North Sea (CNS).
The plan for the East Graben Area was instrumental in the approval of three tieback projects which had sat idle for years − Arran, Columbus and Fram.
The OGA wants to repeat that success at GBA – which has enough unlicensed acreage to cover an area one-third the size of Wales and contains several undeveloped discoveries and prospects.
Scott Robertson, CNS area manager at the OGA, said the level of interest shown in the supplementary round was “overwhelming” as companies “clamoured” for a chance to bid.
Thirty-four companies attended a GBA information day at the organisation in November, Mr Robertson said.
Significant resources remain in the Buchan field itself.
The field lies 96 miles north-east of Aberdeen and was discovered in 1974 with the help of oil pioneer Algy Cluff.
In February 2017, Repsol Sinopec Resources UK called time on the Buchan Alpha platform, which served the field from the early 1980s, taking on 150m barrels of oil over 36 years.
It arrived in Lerwick for scrapping in August 2017.
The OGA wants companies to suggest ways of plugging the “infrastructure gap” left by the departure of Buchan Alpha.
Mr Robertson said: “We have refrained from proposing ways of developing GBA, because we do not want to bias industry thinking. It’s a blank page. The OGA does not always have the answer.”
Nick Richardson, head of exploration and new ventures at the OGA, said area plans were changing the way companies work.
“Before, they would maybe partner with one other company,” he said. “But now we’re hearing companies say they know they need to talk to everyone in the area to do things in a joined up and holistic way.”
OGA chief executive Andy Samuel said:“There’s been excellent interest in the GBA. There’s much to play for from exploration through to development opportunities.
“We are encouraging prospective operators to look beyond individual opportunities and actively partner with other companies to establish a mutually beneficial area plan realising the full economic potential in the area.”
More oil could be pumped from the Greater Buchan Area (GBA) without the costly installation of a new platform or floating production facility, an analyst said.
Ross Cassidy, senior research manager at Wood Mackenzie, described the prize of 300 million barrels of oil as a “material opportunity”.
He believes undeveloped resources could be exploited using facilities currently in the area.
“GBA is surrounded with infrastructure at Golden Eagle, Buzzard, Scott, Forties and Kittiwake, making a tie-back to existing infrastructure possible,” Mr Cassidy said.
“Or, if further volumes are discovered or appraised, a standalone development could be possible. A minimum of 75 million barrels of oil equivalent is likely to be required to be commercially viable.”
The operators of surrounding infrastructure are CNOOC, ConocoPhillips, Apache and Enquest, while Equinor is operator of the nearby Verbier discovery, which will be appraised later this year.
Mr Cassidy added: “The OGA has released a vast amount of data and information in this supplementary round, which should be welcomed. This can only help the long-term goal of maximising economic recovery in the UKCS.
“The Greater Buchan Area holds 300 million barrels of oil equivalent (mmboe) – this is a material opportunity. To put this in context, the last discovery made in the UK of this scale was Rosebank in 2004 and is larger than the Glengorm discovery. Of course, the GBA volumes are a mix of redevelopment, undeveloped and yet-to-find volumes.”
A £20 million competition has been launched to give a boost to innovative ways of storing electricity, the Government has said.
It aims to scale up technologies to compete with current storage methods – lithium batteries and pumped hydro, which uses power to pump water uphill from where it can later be released to drive turbines to generate electricity.
Announcing the competition for innovators, the Business Department said energy storage was the next essential green technology, which would allow the UK to make the most of its growing renewable power sector.
It is targeting the development of long-duration energy storage, as lithium batteries are most cost-effective for short-term storage, and pumped hydro is limited by where in the country it can be installed.
A report from the Carbon Trust in 2016 suggested energy storage integrated into the wider energy system could deliver up to £7 billion in savings by 2030.
Schemes which could secure a share of the money include:
o Compressed air projects, which are similar to pumped hydro, but, instead of using water, they compress and store air under pressure in an underground cavern and then heat and expand it to drive a turbine to generate power.
o Flow batteries, which use non-toxic chemicals dissolved in liquid to create a charge.
o Fly wheels, which provide energy from a rotating cylinder which stores power in its spinning.
o Power-to-gas or liquid projects in which hydrogen, ammonia or biomethane can be created from excess renewable generation and stored.
Up to three demonstration projects will be built and tested by the end of 2021, with the winners of the competition announced in July.
Energy and Clean Growth Minister Claire Perry said: “We are moving to a cleaner, greener economy with renewable generation set to play an integral part of our smarter energy future.
“Energy storage, which helps store electricity when the wind isn’t blowing or sun isn’t shining, can help us change the way we power the world for the better.
“This is why, as part of our modern Industrial Strategy, we’re committing £20 million to commercialise novel energy storage technology which can provide the right infrastructure for our growing renewables industry.”
Proserv has relocated a large part of its field technology services business unit to Westhill, near Aberdeen.
The move from Birchmoss, near Echt in Aberdeenshire, puts the operation far closer to the energy services firm’s HQ at Proserv House in Westhill.
It was prompted by a desire to increase accessibility to its services for the firm’s main clients and to develop an existing site tailored to its needs.
The new base on Enterprise Drive will be known as the Skene facility and boasts 72,000sq ft of yard space, as well as nearly 50,000sq ft of workshops.
Proserv operates in more than 60 countries from 18 global locations.
Its field technology services business unit provides standard, customised and tailor-made services to oil and gas inspection, repair and maintenance, decommissioning, and intervention workover control systems (IWOCS) markets.
The company said the relocation lets it focus on growing its IWOCS division, as well as marine technology, subsea equipment maintenance and testing operations.
A seven-figure sum has already been earmarked for further expanding the premises.
Skene facility general manager Richard Lind said: “We will now be based at a much more integrated facility that has been tailored to our exact requirements.
“This move is effectively about right-sizing our business, improving our efficiencies and enhancing our workflows.”
Proserv field technology services president Sam Hanton added: “The move from Birchmoss to a location better-suited to our needs has been under consideration for some time.
“The Skene facility will undoubtedly boost our productivity, reduce our costs and enable us to focus on our core strengths.
“Strategically, we can now take advantage of a facility that is located much closer to our present and future clients.
“Being based in Westhill allows us to operate an open door policy and, through that, we will look to further expand our growing IWOCS and system integration testing activities.”
Proserv completed a financial restructuring last year, with lenders Oaktree Capital Management and KKR taking a controlling stake.
Jobs at Aberdeen’s Cabot Specialty Fluids are “safe” until the sale to a Chinese firm is complete, according to a spokeswoman.
Employees of the Tullos-based company were made aware of parent firm Cabot Corporation’s intention to sell its specialty fluids business to China’s Sinomine Rare Metals Resources today.
But staff – thought to be around 22 – were left in the dark as to their future at the firm.
A spokeswoman for Cabot Corp. has revealed tonight that the almost £103 million sale of Cabot Specialty Fluids will see staff “remain Cabot employees” until the transaction is complete in Q3 2019.
She said: “Though we have announced a definitive agreement, the Specialty Fluids business is still a part of Cabot and the team will remain Cabot employees until the transaction closes, which we expect to be in Q3 of fiscal year 2019.”
Hong Kong firm Sinomine Rare Metals Resources is a subsidiary firm of Beijing-headquartered Sinomine Resource Group.
Sinomine’s core business is in geological exploration, mining investment and base metal chemical manufacturing.
The parent firm owns around 20 subsidiaries worldwide.
Boston-headquartered Cabot Corp. announced today it had sold the business for £99m to be paid at the closing of the transaction, with £3.8m cash royalties to be paid for “lithium products, payable over a ten-year period”.
Sean Keohane, Cabot president and chief executive officer, said: “We are pleased to have reached a deal with the right strategic buyer to help the Cabot Specialty Fluids segment reach its fullest potential.
“As we continue to execute our ‘Advancing the Core’ strategy, this transaction allows us to maximize the value of the business for our shareholders and focus our resources on advantaged growth initiatives in our core businesses.
“We view the Specialty Fluids segment as having the best growth potential under the ownership of a strategic partner focused on both mineral mining and downstream chemical manufacture.
“The Specialty Fluids segment will benefit from being part of a leading mineral industry player that will invest in its long-term growth.”
After a two month sea voyage from South Korea, the Johan Sverdrup topside has arrived in the yard at Stord, Norway.
It sailed to Norway aboard Boskalis Vanguard, the world’s largest heavy-transport vessel.
The Johan Sverdrup topside was being constructed at Samsung Heavy Industries yard in South Korea.
At the Kvaerner yard on Stord, two pedestal cranes will be mounted and further preparations made before its installation at the Johan Sverdrup field in a single lift by the Pioneering Spirit vessel in spring 2019.
The oil and gas world is abuzz with news of a major gas find in the UK as operator CNOOC and partner Total unveiled the largest discovery in British waters since 2008.
The Glengorm discovery, announced on Tuesday, lies in the UK central North Sea. Recoverable resource are estimated at around 250 million barrels of oil equivalent.
“Glengorm represents an exciting new chapter for the UKCS that continues to yield new resources and opportunities despite its mature nature. This highlights the prolific nature of the basin and the human ingenuity behind unlocking its secrets. With further appraisal and exploration likely to be undertaken, the Glengorm area will likely be an industry hotspot in the coming years,” said Rystad Energy principal Simon Sjøthun.
A material discovery of this size has not been seen in UK waters since Culzean was drilled in 2008. It strengthens the high exploration performance of the UK continental shelf (UKCS) since 2016, according to Rystad Energy.
“The proximity to infrastructure, the reported high quality reservoir and follow up potential all point to Glengorm becoming a large new field development on the UKCS,” Rystad Energy senior analyst Sonya Boodoo added.
Rystad Energy, the independent energy research and consulting firm headquartered in Norway with offices across the globe, including Aberdeen and London, says Glengorm highlights the recent exploration efficiency on the UKCS. Despite low levels of exploration activity in the 2016 to 2018 period, commercial success rates were around 38%, which is above the global average.
“This high exploration efficiency provides much needed positivity around the potential that still exists within this mature province. When the exploration efficiency is coupled with the highly competitive UKCS fiscal regime, the after-tax value creation is substantial”, Sjøthun remarked.
The discovery carries similarities to Total’s Culzean project, currently under development, which is another high pressure/high temperature gas-condensate reservoir with about the same resource potential. Other prospects have been identified and are likely de-risked given the positive results at Glengorm.
“It is likely that the Glengorm license will target these prospects in the near to medium term. If successful, this could pave the way for a Glengorm area development,” Boodoo said.
Given the mature area where the discovery is located, there are numerous infrastructure options available. Shell’s Gannet complex has the closest proximity to Glengorm, which would imply gas exports via the Fulmar pipeline to St Fergus, and liquids via Norpipe to Teesside. Alternatively, Total’s Elgin-Franklin complex and Culzean are also possible offtake routes with more aligned equity interests and stronger infrastructure longevity, albeit with a longer tie-back distance
Aberdeen is the busiest heliport in the world for Sikorsky S-92 operations, according to a new report.
Flights recorded by Westwood Global Energy indicate that S-92s are being worked “intensively” in the North Sea.
More than 5,000 S-92 flights were recorded between December 1-18, 2018.
As of December 18, nearly a fifth (19.3%) of the active fleet were working from Aberdeen, Westwood said.
The report authors said it is “evident, particularly in Brazil and the North Sea, that some units are being used very intensively with some recording over 100 flights over the 18-day period”.
S-92s make up about half of the UK North Sea’s offshore fleet, according to Oil and Gas UK.
Westwood also said newer “Super-Medium” models coming into the market, such as AW189s and H175s, could take a portion of the workload off the S-92.
But the report adds that “given that these units are new into the market”, it’s difficult to predict the impact on the demand of the S-92.
The analysis also concluded that the sector was “unlikely” to see the return of the out-of-service Super Puma models.
The North Sea’s reliance on S-92s is a result of the grounding of Super Puma helicopters following a fatal crash in Norway in 2016.
Thirteen people were killed in an incident off the island of Turoy, including Iain Stuart from Laurencekirk in Aberdeenshire.
Despite the grounding being lifted by UK and Norwegian civil aviation authorities, Super Pumas have not returned to service in the North Sea, with trade unions staunchly opposed to them ever being used again.
S-92s made headlines for the wrong reasons in 2016 when a helicopter spun on the West Franklin platform in the North Sea.
The Air Accidents Investigation Branch later found that had the fault happened any earlier the helicopter could have crashed into the sea.
Investigators later found there was a bearing failure in the tail rotor that engineers had not identified.
Sikorsky has taken a number of steps to improve safety since then, including upgrades to the Health and Usage Monitoring Systems (HUMS) that enables real-time, in-flight data transfer to track the health of the aircraft during a mission.
Lewis Wind Power (LWP) intends to seek additional planning consent for its proposed Stornoway Wind Farm to use larger, more efficient turbines.
The firm said a consultation will be sought to ensure it has the “option” of using the latest and most productive onshore wind turbines on the market.
The company will meet with local residents and businesses at a public exhibition in Stornoway Town Hall on Tuesday 12 and Wednesday 13 February.
The meeting follows on from an initial consultation event last October.
LWP said it believes the alternative design may be “necessary to generate power at the cost required to compete for long-term contracts in a government-backed auction taking place later this year”.
Contracts are awarded by National Grid on a competitive basis with onshore wind farms on Lewis and Shetland competing with major offshore wind developments in the North Sea.
Will Collins, Project Manager, Lewis Wind Power, said: “Since our existing consent was granted in 2015, turbine technology has moved on significantly, delivering substantial reductions in cost.
“We believe that we may need to have the option of this new design if we are to successfully compete against offshore wind for the long term government contracts required to support our investment in the project.”
The developer has made a number of changes to its plans since an initial public exhibition in Stornoway in October last year and is again seeking feedback from the local community.
Mr Collins added: “We have worked hard to develop a proposal that would use the very latest wind turbine technology and which minimises local impacts wherever possible. We have also made a number of changes to our plans in light of feedback from our last public exhibition and from consultees.
“For example, we are now looking at tip heights of 180m rather than 187m on the tallest turbines – very much in line with other onshore wind farms proposed on the Scottish mainland – and we have also moved the proposed sites for a number of turbines further away from the town of Stornoway in response to comments from local residents.
“We look forward to talking through our plans at the exhibition and we will then take some time to consider the questions and comment we receive along with feedback from bodies such as Scottish Natural Heritage before submitting an application to the Scottish Government.
“We hope the community of the Western Isles will get behind our application, which we believe gives us a stronger chance of being able to deliver the project, with the success of Stornoway Wind Farm and our Uisenis development central to unlocking investment in the new interconnector with the mainland.”
Exploring business links between key energy hubs in Scotland and Australia will be the focus of a business event taking place in Aberdeen next week.
The third Aberdeen-Perth, WA Gateway – in association with Qantas and Pinsent Masons – will take place at the city’s Macdonald Norwood Hall on Monday (February 4th) and is timed to precede the 2019 Australasian Oil & Gas Exhibition & Conference in Perth in March.
Chaired by Pinsent Masons’ Global Head of Oil & Gas Bob Ruddiman, the lunchtime session will provide a platform for international networking, knowledge sharing and discussion. Heading up an impressive line-up of live speakers and remote contributors will be the Government of Western Australia’s European representative, Commodore Mike Deeks. He will be joined by:
Aberdeen City Council
City of Perth
Qantas Airways Ltd
Global Scot, Ian Grant
Subsea Technology & Rentals
Managed by Business Plus Scotland, the Aberdeen-Perth, WA Gateway will build on the success of the now well-established Gateway series by offering an international bridge between two leading energy hubs. It will also act as a springboard to further strengthen the links between the locations as well as facilitating additional opportunities between participating businesses and delegates.
Commenting on plans for the third Aberdeen-Perth, WA Gateway event creator and Granite PR founder/managing director Brett Jackson said: “We are once again delighted at the warm reception this event has received from delegates and supporters both here in Scotland and in Australia.
“The level of interest shown thus far is a clear demonstration of a thirst for knowledge. We hope that Monday’s event will pique the curiosity of participants and inspire them to build their own connections between these exciting locations.”
The Aberdeen-Perth, WA Gateway is supported by Aberdeen City Council, Aberdeenshire Council, activpayroll Ltd, City of Perth, Invest Aberdeen, Munro’s Travel Ltd, ODM Visas, Pinsent Masons, Qantas Airways Ltd, Quensh, Scottish Development International, Subsea Technology & Rentals, Think Perth, Western Australian Government.
For more information about the Aberdeen-Perth, WA Gateway, contact event managers Business Plus Scotland on (01651) 891374 or email firstname.lastname@example.org
Orkney’s location is a unique attraction for both oil and gas and marine tourism activity.
Abundant berthing and anchoring options are available at the ports that make up Orkney Harbour Authority’s portfolio and Scapa Flow, Europe’s largest natural harbour.
Scapa Flow is the hub of oil and gas operations in Orkney waters. The world’s first ship-to-ship transfer of liquefied natural gas was undertaken there in 2007, and transfer operations continue to be conducted on a weekly basis. A ground-breaking ballast water management policy was approved by Orkney Islands Council in 2014.
Scapa Flow has proved to be the ideal location for rig and accommodation platform maintenance due to its sheltered, deep water location and easy access to oil and gas activity in the North Sea and west of Shetland.
The local marine supply chain has demonstrated its diverse skills and in-depth knowledge of local waters in servicing rigs and tanker movements, all within the strict environmental policies of Scapa Flow and maintaining the impeccable environmental record.
At the centre of Orkney’s oil and gas operations is the Flotta oil processing terminal, right in the heart of Scapa Flow. Crude oil has been delivered there from the North Sea since 1977.
Currently operated by Repsol Sinopec Resources UK, the site receives both crude oil and LPG via a 210 km pipeline from the Flotta catchment area in the North Sea. The economic benefit to Orkney is considerable, with more than 100 core crew employed there. Many are Orkney residents.
The oil processing terminal at Flotta
Any island destination is reliant on its lifeline freight and passenger links and Orkney is no exception. There are daily freight and passenger services to Stromness from the Scottish mainland and almost daily services from Aberdeen to Kirkwall. In addition, there are 12 daily flights into Orkney from the Scottish mainland and Shetland. In summer, there are regular flights to Manchester and Bergen.
Orkney is home to the largest crab processing plant in Europe. Commercial fishing for prawns, crabs, lobsters and scallops and the recent development of large-scale salmon farms contributes significant commercial value to the local economy. These premium products can be found on the menus of some of the most celebrated restaurants in the UK and Europe.
With over 170 port calls annually, Orkney is the UK’s cruise capital. Hatston Pier just outside Kirkwall, with its 385 metres of berthing and 10.5 metres draft, is the perfect host for even the largest cruise ships. There are three berthing options in Kirkwall and Stromness and two anchorages. It means ships of all sizes can be accommodated.
In 2019, Orkney will receive around 140,000 passengers from across the globe and, in addition, 40,000 crew can also come ashore. Orkney’s World Heritage site offers unrivalled Neolithic tourism experiences coupled with its history of two World Wars and a wide range of itineraries including stunning panoramas, arts and crafts, the stunning 12th century St Magnus Cathedral and the famous whisky distilleries of Highland Park and Scapa. They underpin Orkney’s global tourism growth.
The harbour authority, in conjunction with the local authority, will publish its 20-year ports master plan this spring. The plan will take a strategic view of how the commercial ports in Orkney prepare for the future to continue servicing a diverse portfolio of stakeholders.
Future proofing the port for ever-evolving markets and providing sustainable growth opportunities for existing markets is a challenge and involves some ‘star gazing’, but with the input of all stakeholders and those we aspire to attract, it is hoped the final outcome will be realistic and achievable.
The greatest challenge to Orkney Harbour Authority is that of misperception. Because we are an island location it is often wrongly assumed that we cannot deliver or complete at the same level as mainland locations. Our continued exponential growth in most sectors of shipping, and reporting a £25 million annual gross turnover demonstrates that we are fit and able to meet and maritime challenge that is presented to us.
An outstanding performance in human resources (HR) will see one lucky winner hailed as “fantastic” at The Press & Journal cHeRries Awards 2019.
He or she will be presented with one of the top gongs at the prestigious awards ceremony in Aberdeen on Thursday May 30.
Last year, Balhousie Care Group senior people services adviser Karen Buchan came out on top in the fantastic HR adviser category.
She will be a tough act to follow at this year’s event at Aberdeen Exhibition and Conference Centre, but the cHeRries judges are looking forward to choosing the right person for the coveted accolade.
They are seeking evidence of an HR advisor who during the past year has gained respect from their clients by ensuring high visibility and face-to-face contact.
As well as delivering the highest standards of HR services, budding winners must be able to demonstrate their continuing professional development.
They will also need to show how this supports their ability to understand the business they work for, and apply and adapt best practice to suit the needs of their clients.
In addition, nominees will be judged on their impact and ability to learn from continuing professional development activities during the past year.
Entries are open until midnight on Sunday February 10, meaning there is just over a week for the names of the most well-deserving HR advisers to be put forward for a “fantastic” reward. Entry forms are available online at www.cherriesawards.co.uk
The annual competition celebrating excellence in HR, training and recruitment has 11 categories in total this year.
These include a new community award, named after former cHeRries judge Mike Reid who died last May after battling cancer.
All of the winners will be celebrated in style at the competition’s climax, when more than 450 people from throughout Scotland will gather to toast their success.
The awards are organised by the P&J in association with the Robert Gordon University, Aberdeen, and supported by wealth management and employee benefit services company Mattioli Woods.
GE has announced it will consolidate all its renewable energy business under one banner.
The firm said it will “intensify its focus” on the growing green energy marketplace with the creation of GE Renewable Energy Business.
GE confirmed last night it will shift solar, storage and grid solutions together with its existing onshore and offshore wind and hydro business.
The company will undertake the change across its global business.
GE Renewable Energy chief executive Jerome Pecresse said: “With the unique diversity and scale of this portfolio and the combination of expertise, technology, and local reach, we will create enhanced value for all our customers seeking to power the world with affordable, reliable green electrons.
“Our team is excited by the possibilities this new structure creates to help us lead the energy transition for GE.”
GE revealed it will also “streamline” its onshore wind arm, to compete more effectively on a local level.
It announced it will work harder on improving operations and support customers through “project development, to equipment and services, to full turnkey solutions.”
GE chairman and chief executive H. Lawrence Culp, Jr., said: “This strategic realignment positions GE to lead in the fast-growing renewable energy market.
“This move will help our Renewable Energy teams to better support their customers in leading the energy transition by simplifying the way they can access innovative products, integrated solutions, and services that reflect the evolution of the clean energy marketplace.”
A senior north-east oil and gas executive has been made regional chairman of the Engineering Construction Industry Training Board (ECITB).
Mitch Crichton, a project deliver director with WorleyParsons in Aberdeen, will receive an honorary chairmanship role to help up-skill the workforce in the north-east’s energy sector.
Mr Crichton will also help establish a network of senior industry figures to both support and lead regional and local initiatives, while delivering the strategy and action plans of the ECITB to employers, clients, trade unions, funding partners and agencies.
The former steel worker moved to Aberdeen with Amec Foster Wheeler (Amec) as a project engineer before joining Petrofac.
Mr Crichton re-joined Amec preceding the WorleyParson’s takeover in 2017.
He said: “We must demonstrate the importance of competency, training and development needs by setting in place the framework for our upcoming industry leaders who have both the technical ability and behavioural attributes to drive this industry forward for the next 25 years.
“Making sure the right training is available at the right time, in the right location to support this is very important as is collaboration; if we don’t pool our skills, resources and abilities in the right areas, we risk being inefficient and ineffective.”
Mr Crichton is member of the Institution of Mechanical Engineers (IMA) and is also on the board of the Offshore Contractors Association (OCA).
Chris Claydon, chief executive of the ECITB, said: “It is vital that the ECITB has a strong regional presence in North-east Scotland and I am delighted to welcome Mitch to the ECITB.
“His industry experience will be invaluable in identifying and addressing the long-term skills needs of the workforce.”
A Japanese state-run nuclear fuel laboratory near Tokyo has detected a radiation leak in its plutonium handling facility, but no workers were exposed.
The Japan Atomic Energy Agency said a radiation alarm went off after nine workers changed plastic covers on two canisters containing a mixture of plutonium and uranium and removed them from a sealed compartment.
The agency said the workers, each wearing a mask, escaped radiation exposure after running into another room.
No leak was detected outside the facility, which ended fuel production in 2001 and is being decommissioned.
The cause of the leak is under investigation.
The agency suggested possible damage to the plastic covers.
A bag of plutonium broke during an inspection at another facility operated by the agency in 2017, contaminating five workers.
A “smart” system for charging electric vehicles on the street has been launched to boost the take-up of clean cars.
The new public kerbside charging technology, which includes small on-street hubs called “armadillos” as well as “geckos”, which can be attached to existing bollards or signposts, has been unveiled in Southwark, London.
Connected Kerb, the company behind the system, said it includes parking sensors to let people know where a charging bay is free, contactless payment, internet connectivity, and the facility to stop or start a charge from a phone app.
The technology comes as the Government has set out plans to end sales of conventional petrol and diesel cars by 2040.
Councils are grappling with the need to provide on-street charging for town and city residents who do not have their own driveway where they can plug in their electric cars, with options including standalone units or plugs incorporated into street lights.
A freedom of information request by the Press Association suggested only a handful of local authorities are using their streetlight infrastructure to provide a significant number of on-street charging points connected to lamp columns.
The Connected Kerb technology aims to reduce street clutter, with much of the system below ground, and has environmental sensors feeding back information on pollution to the local authority.
It has been future-proofed to allow the armadillos to be recycled into charge pads which will go on the ground of the parking bay when wireless charging is introduced, the company said.
The armadillo units are made from recycled lorry tyres and customers will be able to select renewable power for their charging.
It is designed to allow residents who do not have off-street parking to charge their cars slowly, for example overnight, although there is the capacity for a faster boost.
Connected Kerb, which won the Mayor of London’s Award for Urban Innovation last year, is also installing a scheme in Windsor and hopes to have 30 to 40 test projects around the country in the coming months.
Chief operating officer Paul Ayres said: “We estimate 70% to 80% in urban residential areas don’t have off-street parking and don’t have the ability to install their own charge point.
“The burden of responsibility falls on councils or private sector to provide the infrastructure to enable the electric vehicle transition.
“We’re using existing street furniture and implementing new robust infrastructure as well.”
He said the company’s role is to enthuse consumers to move to electric, and overcome the issues of confidence and convenience that are still barriers to the shift to clean cars.
He added: “If we reduce emissions people’s health improves.
“We’re doing things from a perspective of trying to improve the environment and ecosystem, not just for us but for future generations.”
Southwark Council is working with Connected Kerb on the scheme, which is also supported by Virgin Media and National Grid, and it is hoped it could be followed by a wider rollout in other London boroughs.
Southwark’s cabinet member for environment, transport management and air quality Richard Livingstone said the data supplied by air quality monitors in the chargers would add to the existing monitoring network.
He said: “We want to help people to make decisions that improve air quality here in Southwark, be that by walking, cycling and taking public transport or by using clean fuel.
“These new charge points are making it easier than ever for people who live in Southwark to make the switch to electric vehicles.”
Oil held its biggest gain in more than a week as investors assessed the impact of U.S. sanctions against Venezuela, while waiting for the outcome of trade talks between Washington and Beijing.
Futures in New York were steady after climbing 2.5 percent on Tuesday. Venezuela is considering declaring force majeure with the U.S. after the White House effectively banned American companies from purchasing its crude. The U.S. and China sit down in Washington on Wednesday for two days of high-level discussions after Treasury Secretary Steven Mnuchin told the Fox Business Network that he expected “significant progress” in the talks.
Oil is trading in its tightest range in four months as the Organization of Petroleum Exporting Countries and its allies trim output to fight a global glut driven by record U.S. production. The crisis in Venezuela has so far had only a limited impact on prices as it doesn’t change the overall supply and demand picture. Restoring the country’s output could take years, according to Jeff Currie, head of commodities research at Goldman Sachs Group Inc.
“There’s little room for oil to gain significantly unless the political situation in Venezuela blows up,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. in Seoul. “Investors are also closely watching what happens with the trade talks in Washington.”
West Texas Intermediate crude for March delivery fell 6 cents to $53.25 a barrel on the New York Mercantile Exchange at 3:29 p.m. in Singapore. The contract climbed $1.32 to close at $53.31 a barrel on Tuesday, the biggest advance since Jan. 18.
Brent for March settlement was 3 cents lower at $61.29 a barrel on the London-based ICE Futures Europe exchange. The contract increased $1.39 to $61.32 in the previous session. The global benchmark crude was at a $8.03 premium to WTI.
Investors are waiting to see how Venezuela responds to the latest American sanctions. If Caracas decides to declare force majeure on its crude exports to the U.S. market, almost 12 million barrels could be affected next month, according to a loading program seen by Bloomberg. Force majeure protects a party from liability if it can’t fulfill a contract for reasons beyond its control.
The U.S. and China are trying to resolve their trade differences before a March 1 deadline, when American tariffs on $200 billion of Chinese imports will increase to 25 percent from 10 percent. The talks come in the wake of lower-level discussions this month in Beijing, and after a period of market turmoil that has left both governments eager to publicly claim progress to calm investors’ nerves.
Other oil-market news: The American Petroleum Institute reported a 1-million-barrel increase in nationwide crude inventories, while a Bloomberg survey estimated a 3.15-million-barrel gain ahead of government data Wednesday. The U.S. is considering tapping the nation’s emergency reserves while a firm decision hasn’t been made yet, Reuters reported, citing a government official. Exxon Mobil Corp. reached a final investment decision to expand a Texas oil refinery by more than 65 percent as surging shale oil production from the Permian Basin creates an abundance of light, low-sulfur crude. Libya’s state-run National Oil Corp. wants to have control over the security of its oil fields to ensure production remains stable, the company’s chairman Mustafa Sanalla said in London.
Ophir Energy has agreed to a takeover by Indonesia’s Medco in a deal that values the London-listed company at £390 million.
Medco will pay 55p per share in cash, a 66% premium to Ophir’s closing price on December 28, the last business day before the offer was announced.
Ophir shares were trading more than 6% higher on Wednesday at 53.8p.
Ophir, which operates in Africa and Asia, earlier this month rejected a 48.5p per share offer on the grounds that it undervalued the firm.
The company’s chairman, Bill Schrader, said on Wednesday: “We are pleased to announce a recommended transaction with Medco. The transaction delivers upfront value in cash to Ophir shareholders for the strategy the Ophir directors set out in September 2018.
“The Ophir board believes the Medco offer reflects the future prospects of Ophir’s high-quality assets, as reflected in the premium of 66% to the closing price of 33.20p per Ophir share on December 28. Consequently, the Ophir board intends to recommend unanimously the transaction to Ophir shareholders.”
The deal has to be voted on by shareholders and requires regulatory approval.
Chinese, French and Italian energy firms are celebrating the biggest gas find in the UK North Sea in more than a decade.
Experts said yesterday the Glengorm discovery showed there is “still life in some of the more mature UK waters”.
Project partner Total Exploration and Production UK – part of French energy giant Total – estimated Glengorm’s recoverable resources at about 250 million barrels of oil equivalent (boe).
At that size, the central North Sea discovery would be not far behind the nearby Culzean field.
Total hailed Glengorm, which is 118 miles east of Aberdeen in the P2215 licence area, as “another great success” in the North Sea, following its 180m boe gas find, Glendronach, west of Shetland, late last year.
Glengorm’s proximity to other installations means it could be developed as a subsea tie-back.
Kevin McLachlan, senior vice-president exploration, Total, said: “Our strong position in the region will enable us to leverage existing infrastructures nearby and optimise the development of this discovery.
“Glengorm is an achievement that demonstrates our capacity to create value in a mature environment thanks to our in-depth understanding of the basin.”
Total holds a 25% stake in Glengorm, alongside operator CNOOC and Euroil, a wholly owned subsidiary of Italian energy company Edison, which own 50% and 25% respectively.
CNOOC executive vice-president Xie Yuhong said: “The Glengorm discovery demonstrates the great exploration potential of licence P2215. We are looking forward to further appraisal.”
Beijing-based CNOOC also operates the giant Buzzard and Golden Eagle oilfields.
The 250-300m boe Culzean field was discovered by Maersk Oil in 2008. Now operated by Total, it will start delivering 5% of the UK’s gas needs this year.
The significance of the gas discovery was highlighted by Kevin Swann, a senior analyst in the North Sea upstream team at Scottish energy consultancy Wood Mackenzie (WoodMac).
Mr Swann said: “At 250 million barrels of oil equivalent (boe), CNOOC Ltd’s Glengorm is the largest gas discovery in the UK since Culzean in 2008.
“There is a lot of hype around frontier areas like west of Shetland, where Total discovered the Glendronach field last year.
“But Glengorm is in in the central North Sea and this find shows there is still life in some of the more mature UK waters.”
The gas at Glengorm is subject to very high pressures and temperatures (HP/HT), which make it more challenging and costly to develop.
But there are other HP/HT fields in the area, such as Elgin/Franklin and Culzean, which could be used as tie-back hosts.
Mr Swann said: “This was third time lucky for CNOOC at Glengorm.
“Technical problems saw it try and fail to drill the prospect twice in 2017, so persistence has paid off.
“This is a good start to what could prove to be a pivotal year for UK exploration, with several high impact wells in the plan.”
Glengorm continues a strong run of exploration success for both CNOOC and Total, which are ranked fifth and third in the world respectively among oil and gas firms in terms of “high impact” volumes – frontier or 100m boe-plus prospects – found in 2018.
Andrew Latham, vice-president, global exploration, WoodMac, said: “Exploration industry returns averaging 13% in 2018 were the highest in over a decade, driven by lower costs and a focus on drilling prospects with a straightforward route to commercialisation in the event of success.
“Glengorm fits this revitalised exploration model perfectly. It looks to be a valuable discovery that should help sustain the industry’s profitability into 2019.”
A fresh dispute over rota changes has broken out between a workers’ union and North Sea service firms.
Unite claims French oil giant Total is “pressuring” Aker Solutions and Petrofac members to move from a two weeks on, three weeks off (2:3) rota to a three on, three off (3:3) rotation.
Unite also accused operator Total of attempting to change worker terms and conditions, such as the removal of “competency payments”.
Industrial action ballot papers went out to Petrofac workers on the North Alwyn and Dunbar platforms yesterday.
Aker Solutions members working on the Elgin platform were also balloted, alongside those working at the Shetland Gas Plant.
Total, which operate the assets, refused to comment last night.
Both firms confirmed they had been notified about the ballot, which would decide whether industrial action takes place.
Unite claimed the dispute could affect up to 250 members.
The ballot closes on February 22.
A spokeswoman for Aker Solutions said: “Aker Solutions has been notified by Unite the Union that they will hold a ballot for industrial action with our employees based at the Shetland Gas Plant and on the Elgin platform regarding a proposed change to rota patterns.
“We are committed to continuing our dialogue with our employees, the union and our customer to bring this to resolution as quickly as possible.”
Petrofac released a similar response confirming its employees on the Alwyn and Dunbar platforms will also be balloted.
Unite regional officer John Boland described the proposed change in circumstances as an effort to “sow divisions amongst trades with differing levels of percentage payments to each trade”.
He added: “Discussions are continuing with Petrofac and Aker, but we have been told that Total are unwilling to move on their position, and that Petrofac and Aker are resigned to this going to strike action.
“Unite call on Total to be responsible and assist Petrofac and Aker resolve this dispute.”
Crew on Total’s Alwyn, Dunbar and Elgin platforms voted to move to 3:3, in exchange for a 15% pay increase in 2018.
Shell and Apache have both announced plans to move workers back to a 2:3 system.
Repsol Sinopec Resources UK is conducting its own review of offshore schedules.
Richard Irvin and Sons owed more than £21 million when it crashed into administration in December, with the loss of 109 jobs.
The scale of debt at the Aberdeen-based group, whose activities included facilities management (FM) and mechanical and electrical (M&E) services for north and north-east customers, is laid bare in papers lodged at Companies House.
Administrators at EY said Richard Irvin owed about £3.7m to the Bank of Scotland, including an overdraft of around £2.5m and a term loan worth about £1.2m.
The firm’s own purchase ledger suggests claims from ordinary creditors will be in the region of £17.4m.
A last-minute “pre-pack” deal was brokered to save 337 jobs at the firm as it collapsed, with private-equity firm Rcapital Partners snapping up the FM business and assets via an investment vehicle for £1.1m.
Pre-packs involve the sale of a struggling business being negotiated prior to administration.
They are completed by administrators soon after being appointed.
EY said it had received nine approaches for a pre-packaged sale of all or parts of Richard Irvin’s business and assets.
Richard Irvin’s finance director, George Still and FM managing director, Mark Buchan, ended up with minority stakes in Rcapital investment vehicle Richard Irvin FM.
But in its notice of administrator’s proposals, EY said this did not amount to a sale to a “connected party”.
It added: “As far as we are aware, George Still and/or Mark Buchan had no connection with Rcapital Partners LLP or the purchaser prior to this transaction.”
A long list of ordinary creditors of the collapsed firm reveals the financial impact on its suppliers.
Plumbing and heating products firm Wolseley was left with a near-£300,000 loss, while its Aberdeen-based William Wilson subsidiary was owed almost £31,000.
Other major creditors include BSS Group, RJC Mechanical, Plumbing Trade Supplies, ADT Fire and Security Services, Edmundson Electrical and Hamworthy Heating, which were all owed more than £100,000.
Local suppliers stung include security services and fire and gas detection specialist Oteac, owed nearly £122,000.
Spelling out the reasons for Richard Irvin’s demise, joint administrators Colin Dempster and Fiona Livingstone said: “Difficult trading conditions, together with increased political and economic uncertainty, resulted in declining margins in respect of the company’s contracts.
“FM benefited from recurring contracts, which were geographically diverse and generally more profitable, however, a number of M&E contracts were completing, which led to delays in receipts.”
EY’s document also shows Bank of Scotland twice extended its overdraft, by a total of £1m, before Richard Irvin finally collapsed on December 19.
Imagine the potential health benefits of knowing the status and condition of your blood around the clock.
Baker Hughes, a GE company (BHGE) is working on a new tool which will do the equivalent for critical oil and gas assets.
BHGE will develop the VitalyX real-time lubricant monitoring system alongside Emirates National Oil Company (Enoc).
VitalyX can be deployed in multiple industries using large machinery.
A cloud-based system detects and measures lubricant properties while simultaneously converting the data into actionable insights.
Enoc has also signed the first order for VitalyX.
The project was announced at BHGE’s annual meeting in Florence.
Lubricants are the lifeblood of many machines. It protects those assets and can be used to check the overall health of a system.
Real-time monitoring helps safeguard equipment by offering a new level of predictive maintenance.
Without continuous monitoring, catastrophic failures are a reality.
Diarmaid Mulholland, head of BHGE’s measurement and sensing business, said: “Imagine knowing what’s going on with your blood 24/7 and developing that technology. This is the same for critical assets.”
Mr Mulholland added: “Our joint focus on lubricant monitoring is a critical and essential element towards making industries safer and more efficient.
“Our co-development of VitalyX with Enoc not only ensures we deliver technology that works in real-world extreme conditions but also has proven experience in the field.
“This technology is a prime example of the Industrial Internet of Things in action – hardware and software working seamlessly together, taking sensor data to deliver new insights we could never achieve before.
“We are excited for this journey with Enoc and many more customers to come.”
Enoc Group chief executive Saif Al Falasi said: “Digitisation is playing an integral role in in driving the transformation of the energy sector, and has contributed significantly to enhancing operational efficiency.
“We believe that our agreement with BHGE – will play a key role in revolutionising lubricant quality testing and physical asset management.
“We are pleased to have been able to work with BHGE on the development of this innovation and look forward to developing many other projects in the near future.”
Engineering consultancy Magma Products has appointed Philip Tweedy as managing director.
Mr Tweedy had been commissioning manager at Magma, which has offices in Aberdeen, Great Yarmouth, Bucharest and Houston.
The company was formed in 2001 and employs 53 people. It provides specialist offshore commissioning and start-up services to the oil and gas sector.
Former managing director Paul Rushton will assume the role of chairman.
Mr Tweedy and Mr Rushton will continue to be based out of the Aberdeen office.
A former engineer with British Coal, Mr Tweedy moved into the oil and gas industry in 1991 and has worked in commissioning ever since.
He worked on projects for a number of companies including Harland and Wolff, Halliburton Brown and Root, Amec, Nexen, BP, Qedi and Shell, before joining Magma Products in 2013.
Mr Rushton said: “The appointment of Phil as managing director ensures a smooth transition for the team, our clients and current projects.
“His promotion will allow me to focus on the development of the business and winning additional projects as the demand for commissioning and start-up expertise grows over the next 18 months.
“Phil has a first-class track record, and his knowledge and experience will be invaluable going forward.”
Mr Tweedy said: “I’m delighted to have been appointed to this pivotal role within the business. Magma has an industry-recognised reputation for the delivery of pre-commissioning, commissioning and start-up projects.
“We experienced one of our busiest periods towards the end of the last year.
“My role will see me take on responsibility for day-to-day operations, while I will also support Paul in delivering the overall strategy for the business.”
Three years ago, influential figures in the oil industry were sounding a clear warning: prices were too low, investment was collapsing and by the end of the decade the world would face a shortage.
In reality, the market today is looking at several more years of plenty, so much so that OPEC is beginning its third year of production cuts just to prevent a surplus.
“We’re in an age of abundance,” said Ed Morse, head of commodities research at Citigroup Inc. in New York. “A supply crunch is not likely at all.”
So what happened?
Oil’s biggest slump in a generation earlier this decade forced companies to slash spending, leading to a flurry of warnings that there wouldn’t be enough growth in oil supplies to meet rising demand and also offset production lost from aging fields.
Investment in oil and gas production collapsed by about $350 billion, or more than 40 percent, from 2014 to 2016 — the sharpest contraction since the 1980s — after crude fell from over $120 a barrel to less than $30, according to the International Energy Agency. The number of new projects approved in 2017 dwindled to the lowest in 70 years, the Paris-based agency said.
In November 2015, the IEA cautioned that supply growth outside OPEC would grind to a halt by 2020. Three months later it was ringing “ alarm bells” for a coming crisis. Total SA Chief Executive Officer Patrick Pouyanne foresaw a shortfall of as much as 10 million barrels a day, about the volume Saudi Arabia was pumping at the time. The concerns were echoed across the industry, from Royal Dutch Shell Plc executives to hedge fund veteran Andy Hall.
Instead, supply has turned out to be plentiful. The U.S. is estimated to produce about 12 million barrels a day of crude this year, a level it was earlier forecast to reach only in 2042. Russia has raised output to a record and Iraq’s is near unprecedented levels. Brazil is set to pump at the fastest pace in at least 15 years in 2019, according to the IEA.
Bank of America Corp. estimates three-quarters of non-shale projects over the next five years will be profitable at just $40 oil, bringing new crude from the North Sea to Guyana even if prices stay low.
These have kept benchmark Brent near $60 a barrel, despite a brief surge to a four-year high above $86 in October as American President Donald Trump’s sanctions against Iranian exports threatened to disrupt the market.
Forecasts of a supply gap persist, but they’re being pushed further out into the future.
The world still needs to add another 10 million barrels a day of production capacity — effectively another Saudi Arabia — by the first part of the next decade, and investment in the industry outside shale isn’t sufficient to ensure this, IEA Executive Director Fatih Birol said in Davos, Switzerland, on Jan. 22. OPEC officials regularly say their current policy is aimed at encouraging enough investment to prevent a supply crunch.
Risks such as the U.S. sanctions on Venezuela and Iran still remain. But as America’s shale surge continues, and oil majors squeeze costs and deploy new technologies, the dangers of a prolonged shortfall are abating.
Though the shale boom has recently shown signs of slowing, the U.S. government forecasts that crude production will continue to hit new records into the next decade, turning a country once reliant on imports into an exporter to rival many OPEC members. Consultant Rystad Energy AS projects that the U.S. will be producing more oil than Saudi Arabia and Russia combined by 2025.
“The shale story is a story of the triumph of technology, and all the signs are that that process will continue,” said Paul Stevens, a fellow at the Chatham House think tank in London. “History suggests you don’t turn that back. It may continue at a slower rate than before, but you don’t tend to reverse it.’’
The expansion isn’t limited to shale. Oil’s crash forced companies to trim excesses, become more efficient and reset industry costs. So, while they were cutting expenditure, most were also learning how to keep the production taps open at far lower prices.
That’s resulted in costs in the deepwater Gulf of Mexico and Brazil falling by 50 percent as they make use of previously built infrastructure and deploy new technology like robotics, according to Citigroup’s Morse.
Norway’s Equinor ASA has reduced the break-even price of its portfolio of new projects to $21 a barrel, a figure that was closer to $70 in 2013. BP Plc last year started output from a Gulf of Mexico project after spending 15 percent below its budget, and is working on a $9 billion expansion of its Mad Dog project, having more than halved the original cost.
“The view that there’s been inadequate spending is based on an assumption about cost structures,” said Morse. “Costs continue to deflate, not increase, and they deflate everywhere.”
There are even signs of a revival in spending, which would only boost production further. Capital expenditure in shale is set to increase by 20 percent this year, the IEA’s Birol said.
“There is no sign of a shortage so far,” said Amy Mayers Jaffe, a senior fellow at the Council on Foreign Relations in New York. “People who believe there have to be higher oil prices in the future, like OPEC or Saudi Arabia, still suggest that the supply gap is still three years away. It is continuously three years in the future.”
Energy giant Shell is at a “pivotal moment” in its dealings with the supply chain, one of its bosses said today.
The Anglo-Dutch firm wants to “reset” the way it works with suppliers and will look to cement “fewer, but deeper” relationships, said Neil Gilmour, vice president CP integrated gas, projects and new energies.
Mr Gilmour said more benefit could be extracted from longer-term relationships were operators and suppliers “keep each other on their toes commercially”.
Speaking at BHGE’s annual meeting in Florence, Mr Gilmour said: “It’s a pivotal moment for the energy industry. It’s a pivotal moment for Shell and also for its relationships with suppliers.
“It’s worth recognising that industry has come out of a tough time. We lost a lot of expertise. A lot of colleagues left the industry and their experience went with them.
“Many suppliers disappeared and some came out in better shape than others.”
He acknowledging that suppliers are “at the core” of everything Shell does, saying: “They do the vast majority of our work. We really want to reset the way we work with them. That means working with fewer suppliers.”
He said Shell wanted to work with “enlightened” suppliers who shared the same safety values and are focused on continuous improvement.
During the same panel session, Phil Kirk, chief executive of Chrysaor, stressed the importance of engaging early with suppliers to help overcome challenges.
Mr Kirk said Chrysaor was “happy to delegate” to the supply chain, but said it was important for operators to fully understand what they are asking service companies to take on.
“Delegate, but don’t abrogate,” he advised.
Mr Kirk also said it was important to make sure the cost reductions and lessons learned during the downturn are sustained, rather than industry allowing itself to slip back into the bad ways of boom and bust.
He said industry would not be entirely successful in breaking the cycle, but that more effort was being made to sustain improvements.
Mr Kirk said some companies deserved a score of “five out of five” for their efforts to collaborate, though others are “closer to a two”.
Speaking to Energy Voice on the sidelines of the conference, Mr Kirk said: “We’re seeing increased activity, which will put pressure on the supply chain and resources.
“It’s critical that everybody – the supply chain and operators – act in best interests of the UKCS and MER UK.
“The leadership teams of suppliers and operators have to intervene if they see bad behaviours creeping in on either side.
“Having said that, I’m more positive now than I have been in past.”
Richard Dyson, chief executive of io oil & gas consulting, agreed that long-term relationships would be beneficial, but said the supply chain needed “some margin to return”.
TechnipFMC has been awarded a contract from Lundin for the Luno II and Rolvsnes development in the Norwegian North Sea.
The engineering, procurement, construction and installation deal is worth somewhere between £190 million and £380.
The contract covers the delivery and installation of subsea equipment including umbilicals, rigid flowlines, flexible jumpers and subsea production systems.
Arnaud Pieton, president subsea at TechnipFMC, said: “This award demonstrates our leadership position in iEPCITM for complete subsea developments. Our strong value proposition builds on early involvement and integrated solutions. By simplifying subsea field architecture, we help our clients improve their project economics.
“We are honored that Lundin Norway is embracing our innovative and comprehensive solutions, engaging with us early through iFEEDTM (integrated FEED) studies and realising the full scope through an integrated EPCI, finding within TechnipFMC all the architects, the competencies, the equipment and services necessary to support this project.”
A leading figure in the battle to reduce hydrocarbon escapes in the oil and gas industry has been announced as a panellist for The Press & Journal’s next Morning Briefing.
Trevor Stapleton, health and safety manager for trade body Oil and Gas UK (OGUK), will appear alongside Kelvin Top-Set managing director David Ramsay, Burness Paull partner Rona Jamieson and Step Change in Safety (SCiS) head of communications Kirstin Gove at the event on Thursday February 21.
The Morning Briefing – Oil and Gas Industry Safety: Preventing Accidents Through Better Communication – at the Marcliffe Hotel will look at why communications can break down offshore and explore how they can be improved to ensure safer operations.
Mr Stapleton, who is also co-chairman of SciS’s safety alerts and moments work group, said: “I’m looking forward to this event, which will highlight the importance of effective communication in our industry.
“It’s important to have a constructive debate about the issues which can affect safety performance.
“I’ve seen first-hand the problems that can arise when we don’t communicate effectively, and I welcome the opportunity to hear more about what people feel industry can do to address this challenge.”
Mr Ramsay added: “The Press and Journal has assembled a wealth of experience on the panel.
“Our combined experiences of communication should make for a thought-provoking Briefing.
“Delegates will leave with some good ideas to take back to their workplace, and with a clear message that effective communication does result in safer and more efficient operations.”
Mr Stapleton is a civil engineer, with masters degrees in construction engineering and business administration.
He is also a chartered safety professional and practitioner member of the Institute of Environmental Management and Assessment.
His 36 years of industry experience were largely spent at BP, where he acquired skills in health, safety and environment, supply chain, engineering and operations management.
Chevron agreed to buy a refinery in Pasadena, Texas, to process more of its West Texas crude, two sources familiar with the negotiations told Reuters Monday.
Chevron is expected to disclose the deal to acquire a 112,000 barrels per day refinery in Pasadena this quarter. The refinery is currently operated by Pasadena Refining System Inc., a Texas-based unit of Petrobras, Brazil’s state-oil run firm.
Chevron spokesman Braden Reddall declined to comment on Tuesday.
Chevron previously said it was interested in buying or building an oil refinery in the Houston area. Though the second-largest energy company in the U.S., the oil major does not own any Texas refineries.
The California-based company needs more capacity to handle shale coming out of West Texas, but most of its refineries process heavier crude — like from Venezuela or Canada — rather than the lighter crude of the Permian.
The Pasadena refinery is 192 acres on the Houston Ship Channel and the purchase includes 274 acres of terminal and other land available for expansion, Reuters reported. The site’s storage tanks can hold 5.1 million barrels and a marine terminal for exports. The employees working at the plant would become Chevron employees after the acquisition.
Houston is the nation’s largest refining hub. It was previously speculated that Chevron would buy either LyondellBasell’s Houston refinery or Petrobras’ Pasadena refinery.
“An expansion of our Gulf Coast presence could be considered if the right opportunity presents itself at the right price,” said Braden Reddall, Chevron spokesperson, in a previous statement about Chevron’s interest in a refinery in Texas.
A row has broken out among members of an island trust involved with the biggest turbine development in the Western Isles.
Crofters claim Stornoway Trust chairman Norman MacIver has a “conflict of interest” in overseeing the 36-turbine trust development on grazings land – while applying for a scoping permission to have turbines on his own land 17 miles away in Barvas.
But Mr MacIver slammed the complaint, made in an open letter to The Stornoway Trust’s factor, as “false and untrue”.
Crofters representing the four Stornoway grazings committees said Mr MacIver was jeopardising the connection of turbines from the island into the national grid.
In the letter they said: “It is a fact that anyone seeking to develop a wind farm in Lewis is in competition for the limited potential space on that grid, with other developers seeking to develop a wind farm in Lewis.”
The letter, signed by Donald M Macdonald, Aignish Grazings Committee; Willie Macfarlane, Melbost and Branahuie Grazings Committee; Calum Buchanan, Sandwick East Street and Lower Sandwick Grazings Committee and Rhoda Mackenzie, Sandwick North Street Grazings Committee – is the latest in a series of concerns the grazings committees have raised about The Stornoway Trust.
The crofting townships want to develop community-owned wind farms on the same common land near Stornoway, that The Stornoway Trust is already progressing an application for a 36 turbine windfarm on.
The letter states: “It is a fact that there will be limited space on the local Lewis grid – even after any grid upgrade or new interconnector.
“It follows that there is a clear conflict of interest between Norman Maciver’s position as a private wind farm developer and his role as chairman of the Stornoway Trust.”
Mr MacIver told The Press and Journal: “There is no conflict of interest, it is false and untrue to say so.
“As a private individual some 17 miles away from Stornoway, I am undertaking a scoping exercise for a wind turbine.
“I told my fellow trustees at the earliest opportunity.”
The volunteer chairman continued: “The capacity of the grid, as it stands, has already been reached – so new projects, wherever they might be on the islands will add to the case for a larger interconnector being provided to the island. “
The past year has marked a significant milestone in the North Sea’s history, with one of the world’s largest oil producers, Shell, celebrating 50 years of North Sea production and predicting a positive outlook for the next 50. This renewed positivity and optimism has been reaffirmed recently with the likes of Gannet E coming back online, Buzzard restarting output and production from new fields, including Garten and Clair.
But in order to sustain the next 50 years in the North Sea, we must look at the need for ongoing investment in the oil and gas sector in order to support this extended life expectancy.
Last year saw a 10-year high for new projects in the North Sea, resulting in an extra 140,000 barrels of oil and gas a day. But given that we have extracted more than 50 per cent of available reserves to date it is just as important, if not more, to look after the aging assets that have served us so well to date, as it is to establish new ones. While the industry looks to prolong production and attract additional investment to facilitate this, it is the role of existing assets that will determine how successful enhanced production is over the upcoming decades.
The age profile of North Sea infrastructure is changing. More than 70 per cent of the world’s oil is based in mature fields, around 59 million barrels per day (bpd). Managing ageing North Sea platforms will be a growing issue in the coming years, so life-cycle management and life-extension are of utmost importance to operators, specifically in the North Sea where more than half of assets have actually gone beyond their initially conceived life expectancy and demand continues to stay high.
What that means is, achieving optimum performance and minimum downtime is vital. Operators, and as a result their contractors, are under pressure to deliver quality repair, maintenance, and refurbishment work quickly, efficiently and above all else, safely. The move of the industry from generalists to specialists, primarily a result of the 2014 downturn, is one that has proven key to suppliers offering specific skilled products and services.
Platforms in later life will continue to have an important role but it is vital that production is maximised, in a safe manner and at the lowest cost. This is an integral part of our own work, where we aim to provide services that add value and offer customers solutions that allows them to get on with their own day jobs, safe in the knowledge that their assets are being upgraded and restored to superior working order.
Just like modern medicine, there is an exact science to maintaining maturing assets for longer-term and it is important that operators have access to the right specialists, to ensure their life expectancy in a region that offers continued opportunities.
Scott Martin is Executive Chairman at Glacier Energy Services
Passengers will be the biggest victims if airlines fail to step in and fill the gap in services at Aberdeen International Airport.
The view came from a north-east MP after a number of high profile firms scrapped services to and from the Granite City.
Next month, easyJet will halt flights to Gatwick and British Airways has faced criticism for cancelling trips and prioritising long-haul routes in periods of disruption.
British Airways recently withdrew flights from the city to London’s Heathrow Airport and easyJet’s Gatwick route will also stop next month.
As a result there will be 140,000 fewer seats between Aberdeen and London and concerns have also been raised over Flybe flights from the city as the struggling firm prepares to be taken over by a consortium, Connect Airways.
Gordon’s Conservative MP Colin Clark has warned of a scenario where there is increased demand but reduced capacity.
The MP met new airport boss Steve Szalay to discuss the recent upgrade at the facility as well as developments at Heathrow.
He has now called for major carriers to fill the void left by the cancellations.
He said: “Airlines should not be short-sighted and back the investment made at Aberdeen. There will be 140,000 fewer seats between Aberdeen and London after next month’s disappointing cuts.
“There may well be room for a new operator, but I would like to see BA fulfil their commitment
to regional connectivity.
“The new AWPR will increase passengers who are keen to use Aberdeen with a reduction in journey time from south of the city.
“We must avoid the perfect storm of increased demand with reduced capacity.”
Mr Clark previously raised the importance of connectivity with Heathrow in Parliament.
Transport Secretary Chris Grayling MP pledged a proportion of Heathrow, which is due to add 25,000 flights a year if plans for a third runway are approved, will be reserved for UK regional airports.
The Scottish Government will learn from the failure of Our Power as it continues to develop plans for a publicly-owned energy company, cabinet secretary Aileen Campbell has said.
Our Power, the Edinburgh-based energy supplier, announced last week that it had ceased trading, having been set up four years ago.
The not-for-profit company had been given loans totalling £9.5 million by the Scottish Government in a move to try and address fuel poverty.
At the Scottish Parliament on Tuesday, Liberal Democrat MSP Alex Cole-Hamilton asked whether the Scottish Government could learn lessons from the volatility seen in the market following the collapse of 11 small energy firms over the last year.
Communities and Local Government Secretary Ms Campbell said: “We’ll give that commitment to take any learning that we can from the experience that we’ve gone through with Our Power.
“Of course, we continue to develop proposals that will deliver the ambition of a public energy company and we’re on track to deliver that ambition by the end of this Parliament.
“This is something that was a new attempt to try and find a way to help people who are predominantly social tenants to have access to low-cost power, and it had done so for three-and-a-half years.
“I suppose it reiterates and underlines how disappointing it is that, ultimately, it hasn’t quite succeeded in this case.”
Ms Campbell stated that the Scottish Government were informed of the company’s collection difficulties last month with a formal request submitted on December 21.
Around 70 employees are at risk of redundancy as a result of the closure of Our Power, with the Scottish Government’s Partnership Action for Continuing Employment (PACE) programme made available.
Customers were given reassurances by Ms Campbell, who said that they are protected and would not be cut off as a result of a change of supplier.
She said: “Our immediate response is focused on looking after the interests of the customers and the staff of Our Power.
“The independent regulator Ofgem is now in the process of appointing a new supplier to take over Our Power’s customers.
“Customers are protected and no-one will be cut off as a result of the change in supplier.
“Ofgem advice is for customers to take a current meter reading and wait to be transferred automatically to a new supplier. “
But the deal would also see an increase in the share amount Rowan shareholders would receive, increasing from 2.6 Ensco shares for each Rowan share to 2.750 per share.
Odey Asset Management, one of Rowan’s largest shareholders, today pledged its support for the amendment to the transaction.
Ensco president and chief executive Carl Trowell said: “By reaching an amended agreement, Ensco and Rowan shareholders will benefit from anticipated expense synergies that are expected to create approximately $1.1 billion (£834m) of capitalized value.
“Furthermore, a larger, more technologically-advanced and diverse offshore driller will provide shareholders of both companies with even greater upside as the industry recovery unfolds – ideally positioning the combined company to meet increasing customer demand and capitalize on significant future revenue growth opportunities.”
A spokesman for Rowan added: “Rowan’s board of directors and management team have a long track record of engaging with shareholders to understand their perspectives and advance their best interests.
“Since Rowan announced an agreement to combine with Ensco on October 7, 2018, we have had extensive dialogue with shareholders, and we continue to receive significant positive feedback regarding the industrial logic and value creation opportunity of the pending combination from many of Rowan’s shareholders.
“We are pleased to have reached an amended agreement with Ensco at an exchange ratio of 2.750, which represents a 24.2% increase compared to the 2.215 exchange rate in the previously announced agreement between the companies.”
Infrastructure giant Balfour Beatty has announced a multi-million deal for Hinkley Point C.
The contract will see the firm deliver the £214 million North and South 400kV overhead line project on behalf of National Grid.
It will also employ over 150 workers.
The deal follows Balfour’s agreement to install the nuclear power station’s electrical works package in a joint venture with NG Bailey in 2015, and the tunneling and marine works package in 2017.
Delivery of the project will see Balfour Beatty design, supply, install, test and commission almost 30 miles of cable works.
Mark Bullock, Balfour Beatty’s chief executive for rail and utilities, said: “Our extensive knowledge and unique capability in delivering major complex Overhead Line schemes, makes us ideally positioned to play a key role in helping to deliver the first nuclear power station to be built in the UK for more than 20 years.
“We look forward to working with National Grid to successfully and safely deliver low-carbon electricity for around six million homes across the UK.”
Work is due to begin this month and continue until 2025.
Energy company EDF has rejected claims that it intends to ‘retreat’ from the the UK energy market due to Westminster government energy market policies.
Media reports claimed last week that the French company was “weighing options to distance itself from the British energy market”.
But today, EDF Energy denied the claims, and reiterated its rejection of the reports.
EDF Renewables is a partner in Lewis Wind Power (LWP), the company behind the proposed Stornoway Wind Farm development, and any move to leave the UK energy market could raise concerns over the future of that project.
A statement issued by EDF, said: “EDF is more committed than ever to the UK market and to strengthening its existing retail business.”
French company EDF is currently building two new nuclear power reactors at Hinkley Point C in Somerset, and is a retail supplier of gas and electric to UK’s domestic and business markets.
A statement from the Comhairle, which is working with The Stornoway Trust to maximise the community return on LWP’s proposed Stornoway Wind Farm, confirmed that the development was progressing its bid for government funds.
The Comhairle’s statement said: “On 25th January the Department for Business, Energy and Industrial Strategy issued the Draft Allocation Framework for the Third Contracts for Difference (CfD) Allocation Round.
This shows Remote Island Wind as an eligible technology category. Lewis Wind Power, in which EDF is a partner, will be bidding into that CfD auction.”
Laden with 400,000 barrels of Venezuelan oil, the Icaro sits in the azure waters of the Caribbean just off the Dutch island of Curacao. It’s been there more than a month, and it’s not going anywhere until state-owned oil company PDVSA pays its bills.
The Icaro has become an unlikely but telling symbol of Venezuela’s woes. And it shows how even before the U.S. sanctions imposed Monday, PDVSA was facing trouble getting its oil delivered to customers around the globe. That could worsen as the regime looks to offset the loss of its U.S. market.
The obstacle isn’t the Trump administration, but some PDVSA’s suppliers — from tow-boat operators to ship owners that transport oil. They’ve grown increasingly frustrated at not getting paid for their services. So they’re turning to Caribbean courts to get the right to seize Venezuelan oil aboard vessels like the Icaro, until some kind of settlement is reached.
“Many of PDVSA’s creditors ran out of patience and were looking to secure their positions,” said Jan A.M. Burgers, a Curacao-based lawyer who specializes in maritime law. “There’s no more logical or better way to do it” than to seize cargoes.
At least four companies have used the tactic since U.S. oil company ConocoPhillips successfully arm-wrestled PDVSA, or Petroleos de Venezuela S.A., in Dutch Caribbean courts last year as part of a global legal war to recoup a $2 billion arbitration award. Conoco obtained court orders to detain an armada of 12 Venezuelan oil tankers transiting the Caribbean, while filing legal papers in courts from New York to Hong Kong.
Trump’s sanctions amounted to the latest U.S. move to pressure Venezuela President Nicolas Maduro to accept a peaceful transfer of power to Juan Guaido, whom the U.S. recognizes as the nation’s interim president. Trump’s action will effectively block PDVSA from exporting crude to the U.S. Venezuela was once Latin America’s largest oil producer. Now it’s pumping less than North Dakota, yet oil exports remain its main source of dollar revenues.
The Dutch Caribbean has become the central legal battle ground because PDVSA operates terminals in Bonaire, Curacao and Aruba to store and re-export crude oil to clients in the U.S. and Asia. Courts there are receptive to issuing liens because laws are based on those in the Netherlands, which set a low threshold for going after companies that don’t pay up, Burgers said. (PDVSA also operates refineries in Curacao and Aruba.)
PDVSA has taken steps to avoid the seizures, mainly by trying to avoid the Caribbean islands. Last year, in the wake of the Conoco spat, only 17 PDVSA vessels discharged in Curacao, compared with 132 in 2017, according to data compiled by Bloomberg.
But if Venezuela wants to sell more oil to Asia because of the U.S. sanctions, it may need its facility in the Caribbean for storage — exposing it to more seizures. For suppliers, seeking court redress isn’t likely to go away anytime soon because some can’t afford to wait for a regime change, said Kurt Barrow, a vice president at IHS Markit. Indeed, suppliers even track PDVSA oil cargoes every two to three weeks to see how close they get to Caribbean territory, said one creditor who spoke on the condition of anonymity.
The 800-foot Icaro was supposed to have discharged its crude and return to Venezuela but suppliers got a court order putting a lien on the oil. Two creditors went after the cargo. Exotic Waves Marine SA claims debts of $7.3 million over unpaid fuel, while Ammon Shipping Co. claims $1 million. It remains docked at berth No. 5.
In another case, Energy Coal Spa from Genoa, Italy, was able to detain the ship Pericles for 208 days over a dispute involving the purchase of petroleum coke from PDVSA. A Curacao court issued a judgment in its favor and was set to sell the oil on board to pay the debt when PDVSA settled the case out of court.
“You put a lien on a cargo to make sure that when you get a court judgment, there will be something there you can sell to obtain what’s owed to you,” said Mayesi Hammoud, a Curacao-based lawyer who obtained the order against the Icaro on behalf of Exotic Waves. “That might be your only chance to get paid.”
The legal strategy carries risks, of course. ConocoPhillips angered many by effectively shutting down a huge portion of Curacao’s economy when it won its orders. And not every court action is successful. In July, Huntington Ingalls Inc., based in Newport News, Va., lost an attempt to put a lien on PDVSA oil stored in Curacao. The company claimed it was owed $130 million from maintenance of two Venezuelan Navy frigates.
Companies going to court also run the risk of ruining their relationships with PDVSA, Burgers said. “It’s really a last resort because this is still a big company with lots of oil,” he said.
For the hundreds of Venezuelans working on seized vessels, there’s not much to be done other than wait. But at least they have a roof over their heads and no food shortages, said an Icaro crew member, who spoke in the condition of anonymity. For Christmas, the workers had potato salad, sausage-stuffed bread and roasted beef, more than many Venezuelans who face empty shelves in supermarkets can say.
Chinese oil company Cnooc today announced a new discovery in the UK central North Sea.
The Glengorm exploration well was drilled to a depth of more than 16,000ft by Borr Drilling’s Prospector 5 jack-up rig.
Project partner Total E&P UK estimated the field’s resources at close to 250 million barrels of oil equivalent.
Glengorm is located in licence P2215, close to existing installations operated by Total, including the Elgin-Franklin platform and the Culzean project, which will achieve first gas this year.
It means the Glengorm could possibly be developed as a subsea tie-back.
Xie Yuhong, Cnooc executive vice president, said: “The Glengorm discovery demonstrates the great exploration potential of licence P2215. We are looking forward to further appraisal.”
Kevin McLachlan, senior vice president of exploration at Total, said: “Following the recent Glendronach discovery, west of Shetland in the UK, Glengorm is another great success for Total in the North Sea, with results at the top end of expectations and a high condensate yield in addition to the gas.
“Our strong position in the region will enable us to leverage existing infrastructures nearby and optimise the development of this discovery. Glengorm is an achievement that demonstrates our capacity to create value in a mature environment thanks to our in-depth understanding of the basin.”
Cnooc Petroleum Europe, a wholly-owned subsidiary of Cnooc, is the operator of licence P2215, with a 50% interest.
Total E&P UK holds a 25% interest and Euroil, a subsidiary of Edison E&P, holds a 25% interest.
Cnooc also operates the Buzzard field, one of the UK North Sea’s biggest producers, and Golden Eagle.
Cnooc, which stands for China National Offshore Oil Corporation, received those assets when it bought Canadian firm Nexen in 2013 for more than £9 billion.
Earlier this month, Nexen’s name was changed to Cnooc International.
The firm has offices at the Prime Four business park in Kingswells and, as of the end of 2017, employed almost 600 people in the UK between its onshore and offshore workforce.
Oil and Gas Authority chief executive Andy Samuel said: “This is very exciting news; Glengorm was first mapped as a prospect around 20 years ago and it is great to see Cnooc taking up the exploration opportunity and completing a difficult high-pressure, high-temperature exploration well.
“Initial results show that Glengorm could be one of the biggest finds in the UKCS in recent years, possibly the biggest since the Culzean gas field was discovered eleven years ago.”
“This underlines the considerable potential of the UKCS. Our official estimate is that there still remains between 10 and 20 billion barrels plus to be recovered, so there is every chance of yet more significant finds, provided industry can increase exploration drilling and capitalise on the real value to be had here in the UK.”
Ross Dornan, Oil and Gas UK’s market intelligence manager, said: “This is a major find and a great example of partner companies, Cnooc International, Total E&P and Edison working together to explore and unlock the potential of the UK Continental Shelf.
“Glengorm was a challenging prospect to drill, however the combined determination and perseverance of the partners has paid off. The location of the discovery, in the central North Sea, also provides a valuable opportunity to make use of the UKCS’ extensive infrastructure network.
“Coming so soon after the Glendronach discovery in September, Glengorm is a major milestone towards adding another generation of productive life to the UK North Sea and realising the ambition of Vision 2035.”
SSE Networks (SSEN) has announced it is seeking support for a proposal to “strengthen reporting standards” and “improve transparency” across energy networks.
SSEN is proposing regulatory accounts should be published in an easily accessible format, with key performance indicators agreed to make it easier to compare performance with other operators.
The energy firm also suggest an open book approach on tax arrangements, pay and diversity.
Colin Nicol, managing director, SSEN, said: “Energy networks are an essential service operating in the public interest and it’s right that we are held to high standards of transparency, accountability and engagement.
“We’ve taken bold decisions in some areas already, such as signing up to the Fair Tax Mark but we know there is more still to do and we welcome working with Citizens Advice, as the independent voice of consumers, to seek views on how we, and the industry, can improve the visibility of our operations and our impacts.”
Citizens Advice welcomed the consultation, urging other network operators to “get involved”.
Stew Horne, Citizens Advice head of energy networks and systems, said: “Citizens Advice developed these principles to indicate whether RIIO2 will deliver for consumers. We welcome SSEN engaging with these important issues.
“This should help enrich the debate and ultimately deliver a better service for Great Britain’s energy consumers. We strongly encourage other networks to do the same.”
Last month, SSE and npower called off a hotly-tipped merger, blaming “challenging market conditions” and the Government’s price cap.
The companies said the deal has been affected by multiple factors, including the performance of their businesses, clarity on the final level of the Government’s default tariff cap and changing energy market conditions.
It’s been a decade of lows for commodities after posting 7 declines in 11 years, but we’ve seriously underestimated lithium. It’s back with a vengeance in 2019.
The commodities market endured yet another annus horribilis, with just four commodities—natural gas, uranium, cocoa and wheat—recording any uptick at all. Last year’s 12 percent slide by the Bloomberg Commodity Index–spurred by 20 percent-plus declines by industrial bellwethers like West Texas Intermediate crude, steel and platinum—came in the wake of two years of modest gains.
Viewed against that kind of backdrop, lithium’s 50 percent correction that snapped a multi-year winning streak appears less vicious. It’s important to remember that prior to the crash, lithium had enjoyed a meteoric rise with prices doubling since the beginning of 2016 and nearly quadrupling over the past decade. The fact that much of the rally coincided with a sharp rise in the value of the U.S. dollar makes it all the more remarkable.
Investing in the commodity market can be a roller-coaster ride; what with the incessant boom-and-bust cycles driven by the ebb and flow in infrastructural spending, production ramps/cutbacks and stockpiling/destocking supplies. And just like other financial markets, trader sentiment plays a big role in determining trajectories.
Unfortunately, it’s the latter scenario that took center-stage during last year’s lithium crash. A furor around anticipated new supply especially from China’s new hard-rock projects and Chilean brine mines got out whack and derailed the market.
Tsunami of Oversupply?
The situation was not helped by Wall Street punters sounding the alarm over the dangers of oversupply …
Shares of major lithium producers and explorers including Sociedad Quimica y Minera de Chile (NYSE:SQM), Albemarle Corp. (NYSE:ALB) and Orocobre Ltd (ASX:ORE) received a severe hammering in March after Morgan Stanley forecast that Chilean low cost brine producers could add as much as 200kt per year by 2025, while expansion of China’s and Australia’s hard-rock mines could pump in another half a million metric tonnes over the timeframe. That’s certainly a massive production ramp-up considering that global production in 2017 totaled just over 200kt.
In August, Macquarie Research provided the final straw after chiming in with a warning that the market was “sleepwalking into a tsunami of oversupply.”
The report put the final nail in the coffin of the decade-long lithium rally– Fastmarkets reckons that prices for battery-grade lithium carbonate in China, by far the world’s largest consumer of high-grade lithium carbonate, tumbled 50.31 percent last year to 75,000-83,000 ($10,885-12,046) yuan per tonne from 158,000-160,000 ($22,932-23,222) yuan per tonne the previous year, as demand waned.
But maybe the bear camp rushed their fences this time…
While it’s undeniable that the carnage managed to exceed even Morgan Stanley’s decidedly pessimistic outlook for global lithium prices to drop 45 percent by 2021, the fundamentals suggest that the selloff was greatly overdone and such low prices cannot be justified by simple market forces of supply and demand.
According to London-based Benchmark Minerals Intelligence senior analyst Andrew Miller, the disconnect between lithium prices and the demand side of the equation has never been bigger.
A cross-section of materials experts have raised eyebrows at the negative assessment, criticizing the investment analysts for underestimating the rise in lithium demand and the complex nature of lithium mining and production ramps. According to them, both MS and Macquarie failed to account for just how big the gap between supply forecast and actual production can be.
And, they might be spot on.
Supply expansions in 2018 came in much lower than predicted and the tsunami of oversupply forecast by the likes of Macquarie Research proved to be little more than changing tides in the lithium supply chain.
A good case in point is Brisbane-based Orocobre, which has become the poster child for just how challenging new brine mining can be. The company’s Salar de Olaroz project in Argentina took seven years to hit its stride but still came up short of production targets. Meanwhile, run-ins with the courts and regulators coupled with mutual accusations of license violations facing Chile’s lithium giants SQM and Albemarle at their Atacama brine projects further reinforce this point.
The screenshot below from Orocobre’s investor slide presentation is a sobering reminder to this reality.
In terms of feedstock supply, SQM and Albemarle had laid out plans for increased production rates. But as is often the case with brine evaporation, the process has been hindered by seemingly endless production delays. SQM hit technical obstacles at its new brine conversion facilities that delayed its target capacity of 70,000 tpa LCE by end of 2018 while Albemarle continues to struggle to achieve full capacity at La Negra II.
The situation has not been much better in China—the ultimate lynchpin to the lithium bear thesis. Many Chinese brine producers in the Qinghai region had outlined plans to triple or quadruple capacities over the coming 3-4 years. A visit by Benchmark Minerals to these operations, however, has painted a dire picture—the technical challenges related to high magnesium concentrations in the region are nowhere near being comprehensively overcome. Across Qinghai’s 10 producers, only an additional 5,000-10,000 tonnes of lithium product found its way to the market, majority of which failed to reach technical grade specifications. This, in effect, means that much of what came online from the region was either reprocessed thus adding to costs or converted to lithium hydroxide in a bid to meet growing demand for nickel-rich cathode technologies.
Although tight credit in China forced some lithium buyers to destock and contributed to the glut, the predicted huge oversupply failed to materialize. Around mid-September, analysts at CRU estimated lithium surplus for 2018 at a relatively mild 22,000 tonnes against a demand of 277,000 tonnes.’
2019: A Transition Year
So far, there is no clear data or evidence that that the lithium demand narrative is about to slowdown, let alone reverse. On the contrary, certain emerging trends in the industry suggest just the opposite.
The biggest near-term driver for lithium demand is the NCM trend. The shift towards cathodes that use huge amounts of lithium hydroxide is already underway, something that is expected to trigger a huge NCM (nickel-cobalt-manganese) ramp up. Benchmark Minerals estimates that 44 percent of mega-and-giga-factories will use lithium as a raw material by 2028 translating into 534,000 tonnes of additional demand.
That projection seems to resonate with Elon Musk’s ambitious target to build 20 gigafactories across the globe over the next decade. Miller sees 2019 as the tipping point where demand will eventually outstrip supply starting 2020.
Meanwhile, Roskill has predicted that the shift to higher-nickel-cathode materials will push many lithium producers to favor production of lithium hydroxide over lithium carbonate thus taking some pressure off the lithium carbonate supply side. The firm has forecast lithium demand to expand by a brisk 21 percent annual clip between 2018 and 2025 with demand expected to grow 13.5 percent in the current year.
But, of course, no lithium bull thesis would be complete without the EV angle.
Currently, the EV market accounts for about 47 percent of global lithium demand. That, however, is expected to drastically change as EV penetration rates coupled with the ongoing trend of electric vehicles using larger battery packs that yield longer ranges leading to electric mobility gobbling up 83 percent of lithium supply a by 2027.
Fastmarkets has predicted EV penetration to hit 15 percent by 2025 from 2 percent currently. EV demand has actually been beating estimates and is constantly being revised upwards to reflect this. The EV explosion is expected to drive a nearly six-fold increase in lithium demand for the forecast period.
Key lithium trends to watch in 2019 and beyond
• Lithium carbonate prices will steady in 2019 before picking up steam starting 2020
• Lithium hydroxide prices could soften a little bit after remaining resilient in 2018
• China will become less important as a global price trend driver as demand rapidly builds up in other key markets
Miller advises investors to keep an eye on new spodumene production, particularly how quickly it can be integrated into the chemical and converter supply chain and turned into either lithium carbonate or hydroxide. A slower ramp is likely to lead to supply constraints and raise prices and vice-versa.
Chinese energy firm Cnooc’s discovery at Glengorm is the largest gas find in the UK since Culzean in 2008, an analyst has said.
Kevin Swann, senior analyst at Wood Mackenzie, said: “There is a lot of hype around frontier areas like west of Shetland, where Total discovered the Glendronach field last year.
“But Glengorm is in the central North Sea and this find shows there is still life in some of the more mature UK waters.”
He added: “This was third time lucky for Cnooc at Glengorm. Technical problems saw it try and fail to drill the prospect twice in 2017, so persistence has paid off.
“This is a good start to what could prove to be a pivotal year for UK exploration with several high impact wells in the plan.”
Glengorm continues a spectacular run of high-impact exploration success for both Cnooc and Total, ranked fifth and third in the world respectively, by exploration volumes discovered in 2018.
Andrew Latham, vice president for global exploration, at Woodmac, said: “Cnooc is a 25% partner in the prolific Stabroek Block in Guyana, where 5 billion boe has been found since 2015.
“It has also found over 1.5 billion boe offshore China since 2017.”
He added: “Total has reset its exploration strategy under new leadership since 2015 and it is now seeing much improved results.
“Over the past year, Total operated the large Glendronach gas discovery in the UK west of Shetland and is a partner in the giant Calypso gas discovery, offshore Cyprus, as well as the Ballymore find, a major oil discovery in the US Gulf of Mexico.
“Through its 20% equity in Novatek, Total also holds an indirect stake in the North Obskoye gas find, offshore Russia, the world’s largest discovery in 2018 with reserves of over 11 trillion cubic feet.”
Mr Latham said: “Exploration industry returns averaging 13% in 2018 were the highest in over a decade, driven by lower costs and a focus on drilling prospects with a straightforward route to commercialisation in the event of success. Glengorm fits this revitalised exploration model perfectly. It looks to be a valuable discovery that should help sustain the industry’s profitability into 2019.”
The Venezuelan opposition leader who has declared himself the country’s rightful president has said US sanctions against the state-owned oil company fall in line with requests politicians have made to “protect” the nation’s assets abroad.
Juan Guaido said in an interview with CNN in Spanish on Monday evening that Venezuela’s opposition-controlled congress approved a measure in January asking foreign nations to ensure the country’s assets are not “looted” by President Nicolas Maduro.
Mr Guaido is the leader of the National Assembly, which is the only branch of Venezuela’s government recognised by the US and other nations.
Mr Guaido said the measure’s only purpose is to ensure that Mr Maduro’s government “doesn’t continue robbing the people of Venezuela”.
The United States announced sanctions against Petroleos de Venezuela SA on Monday, cutting off a vital source of income for the distressed nation.
Oil giant BP has extended Odfjell Drilling’s maintenance service contract on three North Sea platforms.
The agreement is for platform drilling services on the Clair Ridge, Clair and Andrew platforms.
The two-year extension to existing contracts is estimated to be worth almost £40 million.
The deal also has two one-year extension options.
The current contracts will run to the end of January 2019.
Ole Fredrik Maier, EVP Platform Drilling said: “This award from BP to continue our long relationship recognizes Odfjell Drilling as a quality provider of platform drilling and maintenance services with a strong focus on safe and efficient operations.
“We welcome and appreciate this new contract award from BP and look forward to a further long and productive working relationship.”
Aberdeen-headquartered Ardyne Technologies said last night it expects to see the creation of “high quality jobs” in the Granite City as a result of a multi-million cash injection.
The firm confirmed yesterday it had received a £7 million funding package from CYBG, a holding company that includes Clydesdale Bank, Yorkshire Bank and Virgin Money.
Ardyne Technologies, which employs 41 staff in the north-east, said it would grow the number of top jobs in line with its business plan.
The company was founded in 2015 with the £50m backing of private equity firm Lime Rock Partners.
Ardyne develops and supplies technology and services to oil and gas companies around the world.
Adrian Bannister, chief financial officer at Ardyne, said: “With the assistance of Clydesdale and Yorkshire Bank we are able to invest significantly in our own infrastructure and tools to increase our capacity and service more clients, both in the UK and internationally.
“This support has been invaluable and it’s an important milestone for the business as we continue to scale our firm.”
Currently operating in Africa, Asia and the US, Ardyne creates well intervention tools for the subsea sector and holds international offices in Norway and the US.
Ross Goodwin, from the Growth Finance team at Clydesdale and Yorkshire Bank, added: “Ardyne Technologies plays a major role in pioneering the use of revolutionary patented technology in the plug and abandonment market, helping to maximise the use of brownfield wells while continuing to create jobs and enhance the reputation of Aberdeen as a world-renowned innovator in the oil and gas sector.
“The business has got where it is today through the vision of its experienced management team and is in a prime position to capitalise on changing industry trends. Our Growth Finance team is committed to supporting market disrupting SMEs like Ardyne, which are on course for rapid expansion.”
Saudi Arabia expects to reduce oil output once again in February and pump for six months at levels “well below” the production limit it accepted under OPEC’s oil-cuts accord, Energy Minister Khalid Al-Falih said.
The world’s biggest exporter targeted production of 10.2 million barrels a day in January and is aiming to pump about 10.1 million in February, he said. Saudi Arabia’s voluntary limit under the December cuts deal with Russia and other producers was 10.33 million barrels a day.
“Saudi Arabia will be well below the voluntary cap that we agreed to” and will pump beneath its ceiling “for the full six months” of the December cuts accord, he said in a Bloomberg Television interview in Riyadh.
The Organization of Petroleum Exporting Countries and allies including Russia, a coalition known as OPEC+, agreed to pare production starting this month in an effort to buttress sagging oil prices. Crude futures have gained this year as Saudi Arabia leads the way in curbing output amid a surge in U.S. shale-oil supplies. Benchmark Brent crude was trading 42 cents higher at $60.35 a barrel at 10:37 a.m. in Dubai.
“Demand will start picking up at the end of the first quarter and into the second quarter,” Al-Falih said. The impact of OPEC+ output reductions “will trickle down into the global markets over the next few weeks.”
The U.S. is currently “way oversupplied” with its own output and with oil from other Western hemisphere producers, Al-Falih said.
“So, as we look at the oil market, and we see it in the price differentials, it’s really not rewarding us to export a lot of oil to the U.S. And as a result, as we make adjustments, it makes commercial sense that that’s the market that gets the majority of our cuts.”
Saudi Arabia and like-minded countries are determined to drive inventories below the five-year historical average, he said. “We’re going to do it by ensuring that supply is below demand for 2019.”
It’s still unclear what effect political turmoil in Venezuela will have on crude markets, Al-Falih said. Output from the South American OPEC member has languished amid escalating tensions between forces loyal to President Nicolas Maduro and those supporting opposition National Assembly leader Juan Guaido.
Figures used by the Scottish Government to demonstrate the multi-billion-pound impact of the Aberdeen bypass have not been updated in a decade, it has emerged.
Transport Secretary Michael Matheson has admitted that analysis predicting that the Aberdeen Western Peripheral Route (AWPR) would bring a £6.3bn boost over the next 30 years was commissioned in 2008, before two major oil price crashes.
The research forecast that the new road would create 14,220 jobs over the same period.
Mr Matheson quoted the figures last month when he announced that the Craibstone to Stonehaven and Charleston section was finally to be opened to traffic.
North East Tory MSP Tom Mason tabled a parliamentary question asking the transport secretary about the figures.
Mr Matheson said they were from the findings of an economic activity and location impact study carried out by economists when proposals were being developed for the project, prompting further questions about when the research was carried out.
It then emerged the study was published in 2008, with Mr Matheson admitting “no further work of this nature has been carried out specifically for this project”.
Oil went from a July 2008 high of $147 (£111) a barrel to a low of $32 (£24) in December, and slid again from $115 (£87) in June 2014 to less than $35 (£26) in February 2016.
Last night Mr Mason said it was “naive economics” not to revise the figures following the oil price downturns.
“The AWPR is a fantastic project which has eventually brought a lot of happiness to commuters and businesses who rely on the A90,” he said.
“This 11-year-old document is seriously outdated and a pretty good example of the dangerously naive economics adopted by the SNP since they came into government.”
“It seems they have taken a gamble and it’s my sincere wish these sums won’t look foolish in another 30 years.”
A spokesman for Mr Matheson accused the Conservatives of trying to “attack” the AWPR in any way they can.
He said: “The economic benefits of the road to the north-east will be felt for decades to come, regardless of the global oil price – and it is the SNP who have delivered it after the Tories refused to fund the project when they were in office.”
The Trump administration dealt its toughest blow yet to the authoritarian Venezuelan leader Nicolas Maduro, issuing new sanctions on the nation’s state-owned oil company PDVSA that effectively block his regime from exporting crude to the U.S.
The move ratchets up pressure on Maduro to resign and cede power to National Assembly leader Juan Guaido by cutting off the regime from the market where it gets the bulk of its cash. The U.S. and other countries recognized Guaido last week as Venezuela’s rightful president, and he said Monday he would take control of Venezuelan accounts abroad and appoint new boards to PDVSA and its Houston-based subsidiary Citgo Petroleum.
President Donald Trump assailed Maduro in a letter to Congress explaining an executive order he issued sanctioning PDVSA and Venezuela’s central bank. The action would bolster Guaido, he said, while accusing Maduro’s regime of “human rights violations and abuses in response to anti-Maduro protests, arbitrary arrest and detention of anti‑Maduro protesters, curtailment of press freedom, harassment of political opponents, and continued attempts to undermine” Guaido’s government-in-waiting.
“The U.S. is holding accountable those responsible for Venezuela’s tragic decline,” Treasury Secretary Steven Mnuchin said.
U.S. officials had long been hesitant to apply sanctions on Venezuelan oil because they did not want to exacerbate the humanitarian crisis in the country. But with Maduro and Guaido, a 35-year-old engineer-turned-lawmaker, locked in a struggle for support in the streets and the military, they decided it’s now worth the risk. Guaido so far hasn’t been able to sway the armed forces to his side but he’s tapped deep public discontent with an economy beset by hyperinflation and vast shortages of food and medicine.
In an interview with CNN en Espanol, Guaido said that he had spoken to Trump, but did not provide any details.
National Security Adviser John Bolton told reporters at the White House that Trump’s action would block $7 billion in Venezuelan assets and reduce the country’s exports by $11 billion over the next year, though Maduro is sure to attempt to sell PDVSA’s crude elsewhere. Bolton urged Venezuela’s military to accept a peaceful transfer of power to Guaido.
Mnuchin said that Citgo would be able to continue to operate but won’t be allowed to remit money to the Maduro regime. Its proceeds must instead be held in blocked U.S. accounts. The Treasury secretary added that in the “short term” he expects “modest” impact on U.S. refineries. He noted the sanctions wouldn’t affect oil already purchased that is being shipped, and said he didn’t expect U.S. gas prices to rise.
Maduro decried the asset freeze as a “robbery” on state television Monday evening and instructed PDVSA’s President Manuel Quevedo to take legal actions in U.S. and international courts against the sanctions.
West Texas Intermediate crude futures in New York advanced 0.8 percent to $52.40 a barrel as of 6:01 a.m. in London on Tuesday, after closing down 3.2 percent on Monday.
To read more about oil’s muted reaction to the sanctions, click here.
As of Monday, all PDVSA assets and property subject to U.S. jurisdiction are blocked, according to a Treasury statement, and U.S. citizens and companies are generally prohibited from doing business with the Venezuelan firm. The move is consistent with the Trump administration’s efforts to starve Maduro of oil money, while still blunting the potential impact on U.S. refiners and U.S. motorists, said Jim Lucier, managing director of Washington, D.C.-based Capital Alpha Partners.
The administration is using “a scalpel, rather than a meat ax,” he said in an email.
U.S. Senator Marco Rubio praised the sanctions in a statement released before they were announced.
“The Maduro crime family has used PDVSA to buy and keep the support of many military leaders,” Rubio said. “The oil belongs to the Venezuelan people, and therefore the money PDVSA earns from its export will now be returned to the people through their legitimate constitutional government.”
The Florida Republican represents a large Venezuelan expatriate community and is a vocal opponent of the Maduro regime, which the U.S. declared illegitimate last week.
But Senator Bob Menendez of New Jersey, the senior Democrat on the Foreign Relations Committee, said the Trump administration should brief Congress on its moves against Maduro. He praised U.S. efforts to “support the restoration of democracy in Venezuela” but said “there are more questions than answers about the administration’s strategy.”
The sanctions would be the latest move in Trump’s campaign oust the leftist regime of Maduro, who succeeded the late President Hugo Chavez in 2013.
PDVSA has been moving away from dollar-denominated transactions in the past couple of years, since the Trump administration announced financial sanctions in August 2017. The company sells oil to clients in the U.S., Europe and Asia and requires payment in euros, and buys gasoline and diesel for payment in euros as well.
PDVSA also buys fuels via Citgo, owner of three refineries in the U.S. Most of those are barter deals, which means PDVSA gets the fuels and pays the suppliers — including trading house Vitol SA and Reliance Industries Ltd from India — in Venezuelan crude.
U.S. officials successfully lobbied the the Bank of England to deny Maduro access to $1.2 billion worth of gold the government holds in London, stymieing the regime’s efforts to pull in cash from abroad. The U.K., along with Canada and most Latin American countries, followed the U.S. in recognizing Guaido as the country’s legitimate leader.
The Treasury Department also issued licenses on Monday authorizing Chevron Corp., Halliburton Co., Schlumberger Limited, General Electric Co.’s Baker Hughes unit and Weatherford International PLC to continue operations in Venezuela through July 27.
Two oil and gas professionals have taken on boardroom roles at Aberdeen Sports Village (ASV).
The facility’s new non executive directors are Sheila Graham, commercial leader in Shell’s global upstream operated business and Bob Ruddiman, global head of oil and gas at law firm Pinsent Masons.
ASV said their appointment would strengthen its position as a world-class sporting venue.
Ms Graham has more than 25 years’ international experience in a variety of senior roles in oil and gas.
Mr Ruddiman is a regular speaker at offshore industry events and recognised as a leader in his field. As a past member of Aberdeen University’s operating board, he was involved in ASV and Aberdeen Aquatics Centre from the outset.
ASV chief executive Duncan Sinclair said: “Attracting members of this calibre into the busines will strengthen our strategies and ambitions. Their strong knowledge and extensive experience will be invaluable. We have a tremendous opportunity to grow further, as we play an active role in contributing to the local economy, in terms of employment opportunities and the multi-million (pound) benefit of the events we host.”
ASV is a partnership between Aberdeen University, Aberdeen City Council and SportScotland, with more than 7,500 members.
The UK offshore wind sector could become more competitive on price than its onshore counterpart, according to a research group.
Onshore wind is currently one of the cheapest forms of energy in the market, but according to analysts offshore wind could be cheaper by as soon as 2030.
Cornwall Insight claims that technological advancements in offshore wind, coupled with longer blades able to capture more wind, will see it overtake onshore on cost, unless planning restrictions are lifted.
Tom Edwards, senior modeller at Cornwall Insight, said: “The renewable energy market is under a process of transition with onshore wind facing the real prospect of being usurped by its offshore cousin to be the cheapest source of clean power in the not so distant future.
“Improvements in offshore technology are occurring all the time and for offshore wind increasing the size of turbines is making a significant impact. With 8 megawatt (MW) models currently being deployed, and larger 10MW and 12MW models under development as the technology advances. With these larger economies of scale, it is inevitable that costs will fall.
“However, the playing field is not level in Great Britain when it comes to these comparisons.
“Analysis by the Onshore Wind Cost Reduction Taskforce found that LCOE savings of between £4MWh and £7MWh were possible with tip height and rotor diameter optimisation for onshore wind.
“The latest turbine specifications claim to improve load factors by as much as 26%.”
The organisers of the prestigious cHeRries Awards are on the hunt for an exemplary employer of choice as the next edition of one of the north-east’s most prestigious business events looms closer.
Presented annually to the firms and people delivering outstanding performance in human resources, training and recruitment, the cHeRries Awards reach their 2019 climax at Aberdeen Exhibition and Conference Centre on Thursday May 30.
Most employers talk about putting their workforce at the heart of their business strategy but far fewer actually put it into practice.
Firms who can show a strong commitment to doing so have a chance to shine by entering for the exemplary employer of choice category in the the cHeRries Awards.
But time is running out as they must get their entries in no later than midnight on Sunday February 10.
The award is sponsored by Aberdeen University Business School.
Nominees must be able to demonstrate how a strong, employee-focused culture within the organisation has helped employees feel valued.
Judges will look for evidence of excellent staff communication and engagement practices, and of the personal and professional development opportunities that employees are offered to further their career development.
Creative initiatives to improve employee engagement, retention and staff recognition are sure to attract the judges’ attention.
Aberdeen University Business School external engagement director Professor Norman Hutchison said: “Employers of choice have created a culture that is based on a new employment relationship, which is more collaborative.”
Prof Hutchinson said this kind of inclusive business culture better reflected the changing needs of organisations and the people who work for them. “They listen to their employees well,” he added.
Last year, Aberlour-based food firm Walkers Shortbread came away with the coveted award for exemplary employer of choice.
Campaigners in Moray have teamed up to curb the amount of wind farm developments in the region.
More than half of the major projects across the country currently with planning applications submitted to the Scottish Government are in the north and north-east.
Now Mark Holdsworth, who runs a travel firm from his home in Dallas near Forres, has formed the Save Wild Moray action group with others to warn of the effects of over development from the renewable technology.
More than 300 people have signed up to the organisation’s vision on its website to try and preserve the natural habitats.
Mr Holdsworth said: “There’s a lot that is coming our way. Up until now people have tended to fight developments that might be relevant to them – there’s so much now that we think it’s time for a group to look at the effect more broadly across Moray.
“People have got to recognise the impact of these. One of the reasons tourists come to Moray is for the scenery and natural wilderness – that could be lost.
“I don’t want people thinking in 10 or 15 years time that we have made a terrible mistake allowing these to go ahead because by then it will be too late.”
The group is currently focusing its attention on the Clash Gour wind farm proposals, which could lead to 47 turbines up to 575ft tall being built about seven miles south of Forres.
Developer Force 9 Energy has said the project could generate enough electricity to power up to 190,000 homes – while stressing the “unique” landscape of the area can accommodation a large wind farm with “careful design”.
Final plans have also been submitted for the Pauls Hill II wind farm near Knockando, which would include seven turbines up to 500ft tall.
The Scottish Government has stressed that renewable energy projects help create jobs, boost the economy and contribute to climate change targets.
A spokesman said: “All wind farm planning applications must meet strict planning criteria.
“We are committed to delivering a planning system that works for everyone, ensuring local communities have their say.”
The Petroleum Safety Authority Norway (PSA) has urged Aker BP to “learn lessons” from an incident in which a walkway struck the edge of a landing platform, causing damage.
The PSA announced in August 2018 it would investigate Aker BP over the incident, which occurred on the Valhall platform in the Tambar field.
Aker BP’s planning came under scrutiny after a “walk to work” walkway unit wasn’t connected properly from the Island Diligence vessel to the Tambar platform in July.
The incident, which took place during a test programme, meant that those on the vessel weren’t able to control the walkway, causing it to hit railings and then a cable bridge.
No one was injured during the incident.
The PSA said today that Aker BP were in breach of “several breaches of the regulations, all with their background in Aker BP’s planning process for utilising the walkway solution”.
The safety organisation said that Aker BP should “learn lessons” from the incident, adding that it expects the firm to report back by February 13 with an explanation of how it intends to deal with “the nonconformities, and will verify that these are corrected”.
A £2.5 billion fund that was set up to invest in growing businesses throughout the UK has notched up a £250 million Scottish milestone.
Business Growth Fund (BGF) investments north of the border to date are worth more than 10% of the fund’s total value, it emerged yesterday.
BGF was set up in 2011, with backing from banking giants Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered.
It has since invested in excess of £1.8bn in more than 270 companies, making it the most active investor in the UK and globally by number of transactions.
In 2018 alone, BGF invested £441m in UK and Irish businesses in a record year for the investor.
This included £288m in 51 new investments, and £153m through follow-on funding for existing portfolio companies to support further growth.
A £10m follow-on investment from BGF into FrontRow Energy Technology Group, an Aberdeen-based group of oil and gas technology companies, and a fresh multi-million-pound fund-ing boost for Granite City firm Spex Group, were announced just last week.
Scottish investments to date include 30 new deals as well as follow-on funding for existing portfolio companies.
BGF’s team in Scotland, based in offices in Aberdeen and Edinburgh, delivered £42m of long-term finance through three new investments during 2018.
These saw money invested in Buckie-based Parklands Group, one of Scotland’s largest independent care home providers and BGF’s first investment in the Highlands and Moray.
BGF also recently made its first oil and gas industry exit, via the acquisition of Aberdeen-based technology company Petrotechnics by US-headquartered Sphera Solutions for an undisclosed sum.
Another exit during the past year ended BGF’s interest in Aberdeen-based eyecare specialist Duncan & Todd in a £15m deal handing private-equity investor LDC, part of Lloyds Banking Group, a majority stake.
Mike Sibson, head of BGF’s Aberdeen office said: “Entrepreneurs and business owners are clearly concerned about uncertainty surrounding Brexit.
“But it’s really encouraging that for many of them this hasn’t translated into a wholesale pause in their growth plans.
“There is great diversity in the portfolio, and we’ve seen some fantastic growth over the last 12 months in areas such as healthcare, food and drink, and an improving oil and gas services market.”
He added: “Going into 2019 we do expect some continued apprehension in the business community, but what’s crucial is that there is backing available for the companies that have real growth potential.
“We will continue to support these businesses and, with an encouraging pipeline and a number of active discussions ongoing, we are looking ahead to this year with optimism.”
BGF’s success to date has not gone unnoticed overseas. Canada recently launched its own version and Australia could follow.
Bosses at Baker Hughes GE (BHGE) are looking “deeper into the supply chain” in an effort to shrink the energy service giant’s carbon footprint.
Derek Mathieson, chief marketing and technology officer at BHGE, said the company had paid “a lot of attention” to global logistics, including what materials are used for products and where they are shipped from.
Mr Mathieson said a range of investor groups were putting “enormous pressure” on exploration and production (E&P) companies to have credible low carbon strategies.
Large E&P companies have made commitments to start talking about what the industry must do to fit into the energy transition.
Mr Mathieson said the debate had not reached the same “depth” among investors on the supply chain’s side of the market.
But he noted that more conversations were taking place around corporate responsibility throughout the contractor and energy services communities.
He was speaking after BHGE announced its intention to knock its carbon dioxide equivalent emissions down to net zero by 2050.
The company pledged to invest in low carbon products and services to bolster its clients’ drive to keep their carbon footprints in check.
BHGE made the announcement at its 20th annual meeting in Florence, Italy.
A number of new technologies were launched at the event, including Lumen, a ground-based and aerial-drone based methane detection system.
A turbine fully-powered by hydrogen was also showcased.
Mr Mathieson said BHGE had good “line of sight” of its own carbon footprint and was focused on improving reporting standards.
And he said BHGE would learn more about the carbon footprint’s of the companies who supply it with materials and products.
Mr Mathieson said the firm was focused on making everything it does more productive and efficient, and that lowering emissions is a big part of that.
Commenting on the net zero pledge, Mr Mathieson said it was “great” that BHGE had created a message about how it wants to progress.
He said: “A lot of our biggest customers are speaking about this in a more credible way.
“They’re interested that a major technology and services provider is getting into this space and providing more momentum.”
The wheels of recovery are undoubtedly in motion for the global offshore rigs market, analyst said today.
Utilisation and day rate increases are coming, but will happen later rather than sooner, according to Terry Childs, head of RigLogix, part of Westwood Global Energy.
Momentum should build, with visible signs of wholesale improvement emerging in the second-half of the year, Mr Childs said.
Some observers suggested the market would recover in 2018, but that did not materialise, he said.
The number of rigs removed from the global offshore fleet hit an all-time high of 57 last year.
Since the downturn began in September 2014, a total of 212 units have been taken out of service through retirements, conversion to other modes, and total-loss accidents.
In 2018, the split amongst rig types was jackups (37), semis (14), and drillships (6).
As for rig utilisation, jackups and drillships both enjoyed increases for the year, but the gains made in semi utilisation during the first half of the year were erased in the final six months.
Several takeovers were announced or completed during the year.
Borr Drilling bought Paragon Offshore and 24 jackups were removed from the fleet. Borr then purchased nine newbuild jackups from Jurong Shipyard and Keppel FELS and began taking delivery of the rigs in 2018.
Transocean swooped for Songa Offshore’s floating rig fleet and followed that up with Ocean Rig towards the end of the year.
Ensco and Rowan also announced a merger that will be completed in 2019.
Only two regions experienced noticeable day-rate gains in 2018.
The harsh-environment semi-submersible fleet in the Norwegian North Sea started 2018 with rates of less than $200,000.
But surging demand ultimately pushed them into the $290,000-$300,000 range, a staggering increase in a fairly short amount of time.
In the US Gulf of Mexico, day rates for some long-legged jackup units went up by $20,000 to as high as $85,000.
In the rest of the world, rates throughout 2018 were essentially static as rig supply continued to substantially exceed demand.
In a recovering market, rig owners will try to run rates up as quickly as possible.
Some rig owners have begun to take the approach of not bidding for work below a certain level, and while that strategy has not yet translated into contract awards it is likely to change shortly.
The bottom line is that while Westwood believes the days of $600,000 plus day rates are gone, there is still plenty of upside potential.
For upcoming contracts, most rig markets remain oversupplied, so there is little reason to expect any substantial rate improvement there.
But in markets where rig supply and demand are tighter, rigs will likely realise higher rates.
Toshiba has unveiled a remote-controlled robot it hopes will be able to probe the inside of one of the three damaged reactors at Japan’s tsunami-hit Fukushima nuclear plant.
The device displayed is designed to slide down an extendable 11-metre long pipe and grip highly radioactive melted fuel inside the Unit 2 reactor’s primary containment vessel.
An earlier robot captured images of pieces of melted fuel in the reactor last year, but other details of the fuel’s status remain largely unknown.
Toshiba’s energy systems unit said experiments with the new probe planned in February are key to determining the technologies needed to remove the fuel debris, the most challenging part of the decades-long decommissioning process.
Japan shut down all its nuclear reactors after the 2011 accident but has restarted five of them.
With up to four reactors operating last year, they accounted for less than 2% of the country’s power.
A massive March 2011 earthquake and tsunami caused meltdowns at three reactors in the Fukushima nuclear plant, forcing tens of thousands of people to evacuate due to radiation leaks or concerns about the impact on health.
Government, parliamentary and private investigations blamed an inadequate safety culture at the plant’s operator, Tokyo Electric Power Co (Tepco), as well as its collusion with regulators, leading to nuclear safety and regulatory reforms.
Baker Hughes, a GE company (BHGE) has unveiled a new digital methane detector for oil and gas installations.
Lumen provides real-time results by streaming live data from sensors to a cloud-based software display.
BHGE has designed two versions of Lumen — a drone-based system for over-air monitoring and a ground-based, solar-powered wireless one.
Unveiling the gizmo at its annual meeting in Florence, BHGE said the options provide flexibility and cost effectiveness.
Diarmaid Mulholland, head of BHGE’s measurement and sensing business, said: “Methane leak detection is one of the most pressing needs in the oil and gas industry today, and we believe Lumen is a game-changer for highly-effective methane emission monitoring.
“Using advanced sensors and industrial software, Lumen helps operators to protect the environment by detecting harmful methane leaks, and by using advanced data analysis, this technology helps identify and reduce emissions while also increase safety for operators. The applications within oil and gas are just the beginning.”
Isabel Mogstad, a methane solutions expert with the Environmental Defense Fund, said: “In a carbon constrained world, minimising methane emissions is a critical path issue for the oil and gas industry.
“No operator can afford to sit still as service companies and others bring ever more innovative methane solutions to market.”
Oil service provider Bilfinger has announced the appointment of a new maintenance lead.
Bob Taylor will take on the role of maintenance and modification operations manager across Bilfinger’s Aberdeen and Great Yarmouth operations bases, including sites in Esbjerg in Denmark and Groningen in The Netherlands.
Mr Taylor will take on the newly created role after leaving energy firm Centrica.
He has held previous positions at Petrofac and Amec as maintenance manager.
Bilfinger Salamis managing director Sandy Bonner said: “I am delighted to welcome Bob to Bilfinger. I am confident that his technical experience and operational knowledge will further establish the business as an expert provider in maintenance and modifications.
“During his extensive career Bob has worked at various levels with Operators, Duty Holder and Tier 1 Contracting organisations, starting offshore and developing his career through to production integrity management and asset maintenance management. His extensive knowledge of Process Safety and Asset Integrity will prove invaluable as we continue to grow the MMO business”.
Mr Taylor will manage maintenance manpower, construction teams and deck crews as part of his new role.
He added: “Bilfinger is respected as an industry leader in its field, and the opportunity to develop and position this exciting service stream is a challenge I can’t wait to get started on. Bilfinger employ over 36000 employees and I have the opportunity to help showcase their investment in technology and global engineering track record.
“The expertise of Bilfinger colleagues is enviable, and I believe that the development of maintenance and modifications in the UKCS will enhance our reputation as a market leading offshore services company and will be of great value to our existing and new customers.”
Shares in Utilitywise tumbled after the company said it has put itself up for sale and needs to raise £10 million in equity.
The energy consultancy said it is reviewing its options, including selling certain parts or all of the group, following a number of headwinds in its enterprise division. Shares dropped 47% to 3p on the news.
The firm said that in the past two years it has experienced a number of “significant and unexpected challenges and legacy issues” in its enterprise division that has hit its financial performance.
These included the repayment of commission to an energy supplier due to poor operational controls, weaknesses in industry processes relating to early-termination of customer contracts and the introduction of lower caps from energy suppliers on the amount of commission that third-party intermediaries such as Utilitywise can charge customers.
Utilitywise said it needs about £10 million to execute its new strategy that focuses on the group’s corporate division and to enter the micro, small and medium enterprise (SME) market, which it expects will result in profitable growth and significant cash flow in the medium term.
It added that it has also taken steps to improve its enterprise division and reduce costs.
But Utilitywise said it has not attracted a “sufficient level of interest” from existing and new investors to fund the investment, general working requirements of the group and to refinance its £25 million loan. The group continues to be in talks with its bank to provide further financial support.
Given the shortfall in investor appetite for the proposed fundraising, Utilitywise said it will not be able to publish its accounts for fiscal 2018 before January 31 and therefore the group’s shares will cease to trade on the London Stock Exchange’s Alternative Investment Market on February 1.
After months of courting oil officials in Abu Dhabi, Claudio Descalzi got his prize: a stake in the world’s fourth-largest oil processing plant.
The chief executive officer of Rome-based Eni SpA has sunk billions of dollars into three oil and gas production and exploration concessions in Abu Dhabi since March. But on frequent visits to the United Arab Emirates — at least three since November — he repeatedly expressed interest in a piece of Abu Dhabi National Oil Co.’s 922,000 barrel-a-day refining business.
He got it on Sunday. Eni agreed to pay $3.3 billion in cash for 20 percent of Adnoc Refining and also bought an equivalent share in a new oil trading joint venture. The refinery investment, to be completed in the third quarter, is the first for Eni outside of Italy and Germany, and it boosts the company’s existing 548,000 barrel-a-day refining capacity by 35 percent. Austrian oil and gas producer OMV AG bought a 15 percent stake in the units.
“This deal is really important to increase our margin,” Descalzi told Bloomberg Television. “We have strong downstream in Italy, but that is not enough, so we have to diversify our downstream.”
The acquisition will lower Eni’s refining break-even target margin by 50 percent about $1.50 a barrel. It will also deliver a dividend, starting in 2019, that will be a “double digit-figure,” Descalzi said.
Energy services giant Baker Hughes, a GE company (BHGE) today announced its commitment to eliminating its carbon dioxide emissions by 2050.
BHGE is targeting a 50% reduction in CO2equivalent emissions by 2030, before hitting net zero 20 years later.
The company pledged to invest in its portfolio of low carbon products and services to bolster its clients’ efforts to keep their carbon footprints in check.
BHGE made the announcement at its 20th annual meeting in Florence, Italy.
A number of new technologies were launched at the event, including Lumen, a ground-based and aerial-drone based methane detection system.
A turbine fully-powered by hydrogen was also showcased.
Furthermore, consultancy Gaffney, Cline and Associates – a BHGE subsidiary – has launched a new service providing quantitative assessment of the carbon intensity of oil and gas assets.
Lorenzo Simonelli, chairman and chief executive of BHGE, said: “Oil and gas will continue to be an important part of the global energy mix, and BHGE is committed to investing in smarter technologies to advance the energy industry for the long-term.
“Managing carbon emissions is an important strategic focus for our business. We believe we have an important role to play as an industry leader and partner.
“BHGE has a long legacy of pushing the boundaries of technology and operating efficiency. Today we take this to the next level by committing to ambitious new goals for ourselves, and to providing lower carbon solutions expected by customers and society.”
Andy Hessell, managing director of Kellas Midstream, said: “We have grown our business over the last four years and have a strategy to continue to invest, grow and build our portfolio of midstream assets.
As such, we wanted a new name and brand that would align with our business principles of tenacity, integrity and partnership, more accurately reflect our business as it is today, and support our future growth, which is why we selected Kellas Midstream.
“A Kellas is a type of Scottish wildcat known to be intelligent, fearless, resourceful, patient and agile. We value these characteristics and believe they have played a key role in our success to date.
“In addition, by rebranding ourselves as Kellas Midstream, we have retained a clear link with CATS and its strong heritage, which is very important to us. CATS was our first asset and continues to be a significant, successful, and much valued part of our business.
“Our name and our brand may have changed, but our strategy, focus and commitment remains the same. We will continue to deliver safe, reliable and innovative solutions for our customers, and growth for our stakeholders, while supporting the industry’s drive to maximise economic recovery in the UKCS.”
A new Kellas Midstream website will be launched by the end of Q1 2019.
Aberdeen Harbour has today announced figures showing increases across vessel and cargo tonnage, arrivals and passengers.
The growing port saw a 5% rise in vessel tonnage in 2018 compared to 2017, with cargo tonnage and supply tonnage increasing by 3% and 6% respectively during the same period.
Dive support vessel (DSV) tonnage also grew by 26% last year.
Matt North, commercial director at Aberdeen Harbour Board, said: “We are very pleased to see our hard work rewarded in 2018. We embarked upon our ‘bring it back home’ initiative at the start of last year, with the intention of bringing DSV and other core oil and gas activity back into Aberdeen where the extensive supply chain and service network are based, and this has proved to be very successful.”
The port saw its passenger numbers grow in 2018.
Serco Northlink ferry passengers to and from the Northern Isles increased by 5% to over 151,000 passengers in 2018, whilst cruise passenger numbers went up by 71% during the year.
John McGuigan, port operations Manager, added: “In 2018 we experienced our highest number of cruise vessel passengers ever, with the port welcoming just under three-and-a-half thousand passengers.
“These results further indicate that Aberdeen is growing in popularity as a cruise and tourism destination. We are expecting similar levels of cruise activity in 2019 and, combined with the dozen cruise vessel bookings we already have for South Harbour in 2020, it is becoming clear to us that our cruise activity projections for the future will be realised, if not exceeded.”
Energy services giant Wood has agreed to divest its interests in some of its non-core businesses.
The sales, agreed in December, will raise around £21 million.
Wood is divesting its 41.65% stake in Centro Energia Teverola and Ferrara, two Italian based combined cycle gas power plants.
It is also offloading a 52% share in Power Machinery, a China based fabrication and manufacturing facility, and a 25% share in RMS A13 Holdings, a UK roadways group.
Wood has completed the sale of its 50% interest in the Voreas wind farm joint venture in Italy, initally announced in August 2018, raising almost £20m.
David Kemp, Wood chief financial officer, said: “Together, these transactions generate cash proceeds of around $54m and make a good contribution to our non-core asset disposal programme which is a key element of our deleveraging plan.
“Our asset disposal programme is ongoing and remains on track to generate over $200m of proceeds.”
Saudi Arabian Oil Co. is taking a nearly 20 percent stake in South Korean oil refiner Hyundai Oilbank Co. for $1.6 billion, tightening the grip of the world’s top crude exporter on the biggest oil consuming region.
The Saudi state-owned giant, known as Aramco, is seeking to firm up its customer base and market share in Asia as it moves toward a partial listing in what could be the biggest-ever initial public offering.
The Hyundai Oilbank purchase announced Monday would be the latest in Aramco’s refining asset spree across the region in recent years, eyeing stakes in plants in China, India, Indonesia, Malaysia and Pakistan. Aramco has also taken equity positions in whole refining companies, such as its 15 percent share in Japan’s Showa Shell Sekiyu KK or its 63 percent of the common stock in South Korea’s S-Oil Corp.
“Saudi Aramco growing its footprint in the Asian refining industry is now a well-established strategy,” said Vandana Hari, founder of Vanda Insights, a Singapore-based provider of oil market analysis. “It offers security of demand for Saudi crude and enables the company to participate in downstream margins, especially in a region with high demand growth for fuels.”
Aramco, the world’s biggest oil exporter, and Hyundai Heavy Industries Holdings Co., which is selling the 19.9 percent Hyundai Oilbank stake, are expected to hold board meetings early next month to approve the deal, a spokesman for the South Korean company said. Hyundai Heavy Industries Holdings said it aims to complete 1.8 trillion won sale this year, which involves Aramco paying 36,000 won per share.
Saudi Arabia was South Korea’s biggest crude supplier last year, with shipments of nearly 876,000 barrels a day accounting for about 29 percent of total imports. From Saudi Arabia’s perspective, South Korea bought about 12 percent of its total crude exports in December, according to data compiled by Bloomberg.
Aramco aims to own stakes in refining assets with combined capacity of 8 million to 10 million barrels a day by 2028, Chief Executive Officer Amin Nasser said in an interview in December.
The sale would make Aramco the second-biggest shareholder of Hyundai Oilbank after Hyundai Heavy Industries, which currently has a 91.1 percent stake, and will help prop up the refiner’s financials, the South Korean company said in an emailed statement. Funds from the sale may also be used to invest in new businesses, it said.
Hyundai Heavy Industries has been preparing an initial public offering of Hyundai Oilbank, but that could be delayed due to the share sale to Aramco, according to a company spokesman. The holding company’s shares rose as much as 6.6 percent on Monday before paring gains to close up 3.8 percent in Seoul, the biggest gain since Nov. 6, compared with little change in the benchmark Kospi index.
Hyundai Oilbank has 650,000 barrels of daily oil refining capacity, and exports petroleum products globally, according to its website. It operates 2,400 gas stations and vehicle charging stations around South Korea. It also produces petrochemicals and has an oil terminal at Ulsan.
Engineering firm Apollo will design the main structure of a wave power demonstrator destined for waters off Pembrokeshire, South Wales.
The 250ft long structure will be used to hold together the modules which make up the mWave device.
The contract was awarded by the European branch of Australian firm Bombora Wave Power.
It is understood Apollo’s involvement in the first phase of the project will net the Aberdeen firm around £50,000, and create work for about six people.
If Apollo secures contracts for subsequent phases, it could bag a further £150,000.
MWave consists of a series of air-inflated rubber membrane cells mounted to a steel or concrete structure on the sea floor.
As waves pass over the mWave, the air inside the membranes is squeezed into a duct and through a turbine.
The turbine spins a generator to produce electricity. The air is then recycled to re-inflate the membranes to prepare them for the next wave.
Nigel Robinson, manager of Apollo’s marine and renewables wing, said: “We are chuffed to be supporting Bombora with the structural design of the mWave device.
“Bombora has a really interesting concept, and we look forward to bringing our practical experience of offshore energy converters and marine structures to help realise their vision.
“Since our formation we have supported the offshore wind and tidal power sectors, so it is particularly pleasing to see the wave power sector gathering momentum too “
Bombora managing director Sam Leighton said “We are very pleased to have awarded the contract to Apollo who have shown through the tender process that they are very well equipped to provide a high-quality design of the main structure of the mWave demonstration project”
“The mWave system is very adaptable and can be integrated into a range of marine systems such as oil and gas platforms, floating wind power structures and aquaculture facilities.”
Recent press on a skills shortage for the oil and gas industry prompted me to share my views on graduate training and recruitment. It is focused on my own discipline Chemical (Process) Engineering, a key skill for the oil and gas industry.
As someone who has recruited scores of chemical engineers in industry for more than 40 years, and as a university chemical engineering lecturer, I have watched with bewilderment the rise of the graduate assessment centre. These assessment centres are now a feature of the recruitment process where employers bring together a group of candidates who complete a series of exercises, tests and interviews that are designed to evaluate suitability for graduate jobs within their organisation. Of course, graduate recruitment is of prime importance for the longevity of many companies, but are assessment centres really appropriate, or necessary, for recruiting chemical engineers?
Why pass on the responsibility for screening chemical engineers to non-technical individuals? Role playing, psychometric testing, observing group discussions – what does it all provide? Most companies will identify the number of chemical engineering graduates required and where they will begin their career – operational site, design office, R&D, etc. So surely it would make sense for the manager of the recruiting department to identify the new recruit? Obvious key qualities would be technically strong, good team players and good communicators – traits that a competent manager could identify given an hour or so with potential candidates. I would contend that they would do a better job of recruiting than having the same candidates spend two days at an assessment centre. I’d argue that if a manger can’t identify suitable recruits then they should not be a manager.
During my time in industry, my preferred route for recruiting graduates was through summer or industrial placements. That would allow a 2-3 month ‘interview’ by both sides. The experience allows for an almost guaranteed assessment of the suitability of the graduate. I have noted that some companies now use assessment centres to select candidates for summer placements too. This is certainly good business for those running the assessment centres.
And what was wrong with the so-called “milk round”? The employer reviewed CVs and identified students for interview. The employer visited the university during the first term and screened candidates via half-hour sessions. This provided a shortlist of candidates that were then finally interviewed by technical managers during the spring break. The half hour was only a minor intrusion into the students’ study time. Human resources’ only involvement was to discuss terms and conditions. That’s how it used to be. Are chemical engineering graduate numbers now so high that this is no longer possible? I don’t think so.
Figure 1: Chemical engineering intake (source UCAS)
As can be seen from Figure 1, the annual UK chemical engineering student intake hovered around 1,000 for around 30 years, which was followed by a very rapid rise. What was the catalyst for the rise? I think it was mostly driven by former prime minister Tony Blair’s 1997 “Education, education, education” initiative. While the importance of education cannot be disputed, I think the mantra should be “The right education, the right education, the right education”.
It is a bit of a head scratcher as to why so many more chemical engineers were being educated when the UK chemicals industry was shrinking. Does “the right education” involve offering more university courses and having more students going to university? Perhaps the right education means more apprentices and more technicians. In my early career days I recall there being a significant number of employees with HNDs in chemical engineering. That seemed to be a perfectly appropriate qualification for many industrial roles. Furthermore, with today’s fee system, the HND route would not leave graduates with large debts after 4–5 years’ worth of study.
I am not convinced that our education priorities reflect the local/national demand with respect to chemical engineers. I am aware of the many reports stating we need more engineers, but I know of no large employer of chemical engineers that is saying “hey you need to train more”.
Returning to assessment centres, what also bugs the hell out of me is that assessments are held during term time. Usually the last term of the most important year of the student’s degree. I have had students requested to attend an assessment centre during exam weeks. I have even had a request that a final exam be rescheduled. How unaware of university practices must an assessment centre be to suggest that? Many students attend 4–5 centres – with travel time that could result in them losing 15 days of final-year attendance. Employers – if you have to conduct these assessments, why not do at the summer, winter or spring breaks?
Speaking about their assessment centre experiences, my students told me:
“When it comes to diversity and inclusion issues you know the answer they want to hear” (The student knows what the interviewer wants as an answer. They give the right reply whether they believe it or not, you can’t do that with a technical question)
“It felt like going back to school, carrying out menial tasks and completing patronising tests (for example, a maths test based on GCSE standard knowledge)’. “There were 3 separate interviews on the day, these were “strength-based interviews” which consist of pre-set questions which are to be answered with no input from the interviewer. Overall, this trip (for which costs were not even covered) felt like a complete waste of time.“
“The levels of hell that must be travelled through to even be in contact with a recruiting engineer are a farce”.
I also sense a high level of stress caused by the assessment centres at a time when the student should be focussing on their studies.
The most telling anecdote I heard was of the graduate who had previously spent a summer placement with a company. Staff in the department agreed that the student was a perfect fit for them. The company assessment centre failed that same student the following year.
Most of the companies using assessment centres insist on a 2.1, or a first-class degree classification. It is interesting to review what has happened to degree bandings. Comparisons of the bandings I have experienced are shown in Table 1.
Lower second 2.2
Upper second 2.1
The table clearly shows that the bands have been reduced making it easier to obtain a specific grading. Is it any surprise that the media is picking up on the increase in the number of 2.1s and firsts? For many universities the percentage of students gaining a 2.1 or a first is more than 90% the averaging being around 75%. Does that feel right? As a former employer it certainly does not. A first used to be an indicator of an exceptional student, that is no longer the case. Of course there are still exceptional students but they are not clearly differentiated by the modern grading structure.
My experience also indicates that there is a large difference in ability between students averaging in the low 60s and those averaging high 60s. In the past this would have been picked up by the grade band, but this is no longer the case – nowadays, both would receive a 2.1. Similarly, today, students averaging low 70s and those averaging high 70s would both receive a first.
What worries me most, is that the pass mark for UK degrees is now commonly 40%. Are we saying that graduate engineers with real responsibility have potentially failed to grasp 60% of the learning outcomes of their degree? It will come as no surprise that I consider the current grading system to be badly flawed.
There is also a suggestion that exams are getting easier. I’m not so sure but I do feel that we are getting very good at teaching students how to pass exams, and that includes schools. Critical thinking and problem solving – well that’s another matter. I do think that we should be working harder to teach students how to handle the multi-stranded problems that they will face in industry.
Am I just a dinosaur who grumbles “it wasn’t like this in my day”? I don’t think so and with respect to chemical engineering assessment centres, student numbers and degree gradings, I think there is a mammoth in the room.
The north-east’s supply chain is well placed to support major wind farm development projects off Scotland’s east coast, Sir Ian Wood said.
Sir Ian, chairman of economic development body Opportunity North East (One), said north-east companies were “early movers” in offshore wind, and gave special mention to Ecosse Subsea Systems, EnerMech, Proserv and Rovop.
And new port facilities in Aberdeen will complement the region’s extensive maritime capability and major offshore project experience.
The waters of Scotland’s north-east coast are home to the Hywind and European Offshore Wind Deployment Centre projects.
Major east coast offshore wind arrays in development include Seagreen Alpha and Bravo and Neart Na Gaoithe in the outer Firth of Forth and Inch Cape off Angus.
The opportunities presented by the move to a lower carbon economy will be highlighted to business leaders in Aberdeen this evening, when Chris Stark, chief executive of the UK Committee on Climate Change, addresses an SCDI dinner supported by One.
Sir Ian said: “The oil and gas industry has an important role to play in delivering energy transition to a lower carbon economy and is actively pursuing this agenda, from international oil companies right through the supply chain.
“Our company base in and around Aberdeen is uniquely positioned to develop a competitive position in this growing sector and offshore wind is a significant and near-term commercial opportunity because of the scale of new offshore arrays on the east coast of Scotland.
“The UK has installed more offshore wind capacity than any other country and in recent years much of that development has been in the Moray Firth and off Aberdeen.
“This experience is matched with a mature supply chain already diversified into the sector, unrivalled experience of major offshore projects, and investment in our ports, including the new £350m South Harbour.
“We have the marine and onshore capability and established supply chain to support the successful growth of offshore wind.
“Our oil, gas and energy supply chain is a key economic asset regionally and nationally, and helps to make us one of the most productive regions in the UK. Energy transition is vital to anchoring these businesses and their high-value employment long term. Developing our position in offshore wind is a clear, early opportunity for further diversification of our market focus.
“Investment in new UK offshore wind capacity in the next three years is estimated to total £18bn. That’s a huge opportunity for supply chain companies to bring innovative products and services to market to meet the growing demand, in the UK and internationally.”
A pair of north east explorers have said experiencing first-hand the effects of climate change has led to their backing of a ground-breaking clean energy scheme.
Hazel and Luke Robertson’s treks have taken them across the Sahara, the South Pole and up Mont Blanc, to name a few.
The Stonehaven couple are explorers-in-residence at the Royal Geographic Society, but spend their day jobs as consultants with Pale Blue Dot Energy, the firm behind the Acorn carbon capture and storage (CCS) scheme at St Fergus.
CCS technology aims to reduce the effects of climate change by storing harmful emissions underground – or in the case of Acorn, storing them under the North Sea.
Both knew from an early age they wanted to work on climate change solutions, which has since been bolstered by their treks together, seeing vast glaciers and frozen lakes melted away.
Nearly two years ago they had an expedition in Alaska which had to be cut short due to a global warming phenomenon.
Luke said: “We were on our longest expedition in 2017 in a cycling and kayaking trek across Alaska. We have also spent time in the Alps and in both of those locations we have seen the effects of climate change first-hand.
“We wanted to travel from the southern-most point to the northern-most point of Alaska but our expedition was cut short at the very end due to the fact that many Arctic lakes which once held water have now drained, meaning we were unable to kayak in them.
“Having that personal and very clear view of climate change had a big impact and it has stuck in our minds.”
The pair had a similar experience in the French Alps, over a period of years noticing the steady retreat of the Mer de Glace glacier.
Hazel added: “We were fortunate enough in 2001 to go to the French Alps and returned 17 years later and we were able to count the number of steps it had receded.
“In 1988 it would have taken three steps to get down the ladder to the glacier, in 2001 it took 106 steps and by 2018 this had extended to more than 400 steps.
“It really put in context the global impact of climate change.”
Both see CCS as a vital means of tackling the growing effects of climate change.
Luke had to undergo life-saving brain surgery in 2014, but went on to be the first Scot to ski solo unsupported to the South Pole.
He joined Pale Blue Dot last year following a job with the UN on sustainable farming.
The pair tour the country speaking about their experiences, and that extends to climate change action.
The couple recently returned from the COP24 climate conference in Poland, promoting the Acorn CCS project.
Hazel studied CCS at university, where she gained an understanding of the key role it can play in the future energy mix.
Along with her work for Pale Blue Dot, she is a board member of the Carbon Capture Association.
Last year saw the UK host an international CCS conference in Edinburgh, with funding announcements for Acorn and similar projects in the country.
Acorn has also won lease agreements with the Oil and Gas Authority and Crown Estate Scotland, which will help in the ultimate aim of upscaling with the use of North Sea infrastructure.
Hazel said: “I wanted to do something in the natural world and something that is also a climate change solution, using my skills to tackle that, that’s where Pale Blue Dot comes in.
“Everyone wants to do something to mitigate climate change and CCS is one of the many tools we need to achieve that going forward.
“Last year the UK and Scottish Government moved up their support for CCS, especially with the Edinburgh conference. That’s never happened before for them to come together in Scotland in such an international way.
“The momentum has certainly been going in the right direction and this year is about the government working with the industry to put their plans in place.”
Directors at an Aberdeen-based marine and risk consultancy have vowed to fulfil their former boss’ ambitions for the firm.
Marex managing director Ian McDougall died during the festive period after a short illness. He was 67 years old.
A qualified master mariner, Mr McDougall initially joined the firm as a marine team leader, overseeing rig moves and other operations.
He took over as managing director and major shareholder in March 2007.
During his time in the offshore industry, Mr McDougall worked on anchor handlers, platform supply vessels and dive support ships.
His career also included a spell as an Aberdeen harbour pilot.
Marex thanked clients, associates and contractors for their messages of support.
The remaining directors will continue to spearhead the company’s strategy, while the heads of department manage its operations.
The company recently moved into offices at Centurion Court, North Esplanade West, after relocating from Greyhope Road.
The business has been recruiting and expanding its team in the last year and will continue to do so.
Marex currently has 12 employees, four of whom are long-term external consultants. Directors intend to build the headcount up to 16, and possibly higher.
The company can also call upon a wider pool of about 20 consultants.
Founding director Vic Gibson said: “We are saddened by the loss of our managing director, but nevertheless are determined to go on into the third decade of the 21st Century, supporting our clients in the manner he had come to expect of us.”
Mr McDougall’s wife, Karen, who is also a director at Marex, said: “I think the overwhelming response from people in the industry was that Ian was a gentleman, professional, highly respected.
“People came to work for Marex because they wanted to be part of its reputation, excellent training and skills development that opened many doors for employees when they wished to develop their careers further and on many occasions wanted to come back.”
She added: “Ian wasn’t just a businessman. He took great satisfaction in seeing young people do well, providing training opportunities and personal mentorship, a legacy Ian has developed and passed onto his management team at Marex.
“Over the last year Marex has been recruiting and expanding. As a result of growing contracts, this highly respected company sees a very busy start to the year with its strong management team looking forward and continuing to expand its client base over the next 12 months.”
Offshore vessel owner Prosafe has revealed it will shed up to 150 jobs through voluntary redundancy in a effort cut operating costs.
Cyprus-headquartered Prosafe, which has a ship operations office in Aberdeen, is believed to have issued notices to staff last week.
The redundancies affect crew on the Safe Caledonia and Safe Zephyrus flotels.
But those on the Safe Scandinavia have been already been dismissed with no future work booked for the support vessel.
However, those workers would be brought back if work is found within two years under Norwegian law.
Safe Caledonia completed its operations for BP at the Clair Ridge platform in the UK on 22 November 2018.
Jake Molloy, regional organiser with seafarers union RMT, confirmed last night that he and Norwegian union Industri Energi plan to meet Prosafe next week in an effort to safeguard jobs.
The 150 workers affected by the redundancy call are understood to be mainly British.
A spokeswoman for Prosafe said: “Prosafe confirms that as part of the ongoing initiatives to support further operating efficiencies, the company have commenced implementing alternative marine crewing profiles. In this respect, Prosafe has offered a number of its offshore employees the opportunity to apply for voluntary redundancy.
“The rationale behind these changes is intended to support Prosafe’s objective of reducing the company’s current operating cost per day whilst ensuring Prosafe’s ability to deliver customer contract compliant, safe and efficient operations.”
Mr Molloy added that he believed that the move by Prosafe was an attempt to “move full-time staff out and moving agency staff in at significantly lower rates. We are now doing the final push to meet with them.”
Previous Solar Wars articles have noted that tribunals hearing Energy Charter Treaty (ECT) claims by an investor from one EU Member State against another EU state had consistently held that the decision of the Court of Justice of the European Union (CJEU) in Slovak Republic v Achmea did not apply to ECT claims.
However, on 15 January 2019, 22 EU Member States issued a declaration intended to spell the death knell for intra-EU ECT claims. Nevertheless, other Member States are taking a different approach.
Achmea: a reminder
In Achmea the CJEU held that an arbitration clause in bilateral investment treaty (BIT) between two EU states contravened EU law, because it is for the courts of EU Member States and the CJEU to determine questions involving EU law.
Subsequent ECT tribunals such as those in Antin Infrastructure v Spain (see Solar Wars Part VI) and Vattenfall v Germany (see Solar Wars Part VII) rejected the application of Achmea to intra-EU ECT claims. They pointed out that Achmea applied only to BITs, not multilateral treaties like the ECT; the EU itself is a signatory to the ECT, which contains a clause referring disputes to arbitration; and there is no carve-out for intra-EU disputes.
The applicability of Achmea to ECT arbitrations is currently being considered by the Svea Court of Appeal in Sweden, in an appeal of the Novenergia v Spain award (see Solar Wars Part IV). Spain has asked the court to refer this question to the CJEU.
On 15 January 2019, EU member states issued three declarations accepting that Achmea precludes any further intra-EU investor-state arbitrations.
In the declarations, the Member States undertake to:
o inform arbitral tribunals in all pending arbitrations about the legal consequences of Achmea;
0 inform “the investor community” that no new intra-EU investment arbitration proceedings should be initiated;
0 request their national courts and any third country courts to set aside and/or not to enforce any intra-EU investor-state awards, due to a lack of valid consent to arbitration;
o procure that any state entities which have brought investment arbitration claims against another Member State will withdraw those claims; and
o terminate all intra-EU BITs by way of a plurilateral treaty or (if more expedient) bilaterally, ideally by 6 December 2019.
The declarations also confirm that any intra-EU investment arbitration settlements/awards which were complied with or enforced before Achmea should not be challenged.
Disagreement on the ECT
That is where the Member States’ unity ends. The main declaration, signed by 22 Member States (the Main Declaration), accepts that Achmea also applies to ECT arbitrations.
The reasoning behind this argument – that tribunals have interpreted the ECT wrongly and/or if such an arbitration clause exists, it should be disapplied – has already been rejected by the tribunal in Vattenfall AB v Germany (see Solar Wars Part VII).
Nevertheless, the Main Declaration applies all the undertakings mentioned above to ECT arbitrations, save for the undertaking to terminate all intra-EU BITs: instead, there is a further undertaking that Member States and the European Commission (EC) will discuss what additional steps are necessary “to draw all the consequences from Achmea in relation to the intra-EU application of the Energy Charter Treaty.”
In contrast, Finland, Luxembourg, Malta, Slovenia and Sweden signed a Declaration (the Second Declaration) which recognises that the question of Achmea’s applicability to the ECT is being considered in the Novenergia appeal. Consequently, this Declaration omits the Main Declaration’s conclusions about, and commitments with regard to, the ECT. The implication is that those Member States will not take the actions specified in the Main Declaration with regard to intra-EU ECT claims unless and until the CJEU has determined whether the Achmea principles apply equally to ECT claims.
Finally, Hungary issued its own Declaration. This echoes the Main Declaration’s conclusions about, and commitments with regard to, intra-EU BIT arbitrations, but expressly states that in Hungary’s opinion, Achmea does not apply to ECT claims.
Where does this leave EU investors in Member States’ Energy sectors?
An EU investor in another EU Member State’s Energy sector can still bring a claim under the ECT, which (for now) remains in force. Moreover, an arbitral tribunal constituted to hear such a claim will likely accept jurisdiction.
The difficulty is with enforcing any award in the investor’s favour. The EC has instructed Member States not to pay awards made in intra-EU investor-state arbitrations as they would constitute illegal state aid. The Main Declaration makes it clear that enforcing an award would be all but impossible in the 22 signatory Member States. It is also likely that enforcement would likely be stayed in the courts of the signatories to the Second Declaration, and refused if the CJEU applies Achmea to ECT claims.
On the face of it, Hungary is the only EU Member State which would not contest jurisdiction in, and enforcement of, an intra-EU ECT arbitral claim on Achmea grounds.
However, nothing would prevent Hungary from changing its position. Hungary’s Declaration is not a legally-binding treaty, and if its courts found that EU law precluded them from enforcing a contested ECT award, they would not enforce it.
That leaves a successful EU investor-claimant with one option: enforce their award against the relevant Member State’s assets located outside the EU. However, even if such assets can be located, the Member State could still oppose enforcement on the grounds that under their laws there would be no valid consent to arbitration. It would be for the courts where enforcement is sought to decide whether to enforce or not.
Intra-EU ECT claims are not yet impossible, but it is going to be increasingly difficult to enforce awards, rendering the claims essentially futile. There might be some grounds for investors to challenge the Member States’ undertakings as stated in the Declarations (e.g. denial of access to justice), but investors with existing intra-EU claims might have no option but to pursue them in the courts of the defendant Member State – not an attractive prospect. Investors wanting full protection for their investments which can be enforced by a claim before an independent, impartial arbitral tribunal should consider structuring their investment via an entity domiciled outside the EU.
Could you put everything on hold and travel the world with your kith and kin along for the ride? The Mennie family did just that and told Ellie House about the adventures along the way
We have perhaps all dreamed of travelling the world at some point, swapping the humdrum of everyday life for more exotic surroundings.
But one way or another, everyday commitments tighten their grip, from the nine to five to the school run, not to mention the financial implications of packing up and leaving everything behind.
Dreams of far-flung destinations become simply that – dreams that we resign to a “one day” list at the back of our minds.
But for Lynne Mennie, one day might never come, and a quick conversation with her husband, Alex, saw the couple leave their home in Cove and go travelling for almost a year… with their two sons in tow.
From eating barbecued rat to risking getting caught up in a tsunami, life has never quite been the same, and Lynne is preparing to go off on her travels again after falling in love with Mexico.
She believes that everyone should take up the opportunity to travel if given the chance, and only returned to the UK after funds ran out.
“It was a very sudden decision to go travelling – I think it took us about an hour to decide in the end,” said Lynne, who is a project manager.
“We didn’t do months of planning and we left having only booked our first week of accommodation and flights to Peru.
“Alex worked in the oil industry when he was made redundant, and near enough at the same time, I was offered a chunk of severance pay.
“We decided that rather than go all doom and gloom, we’d take advantage of this and head round the world.
“We went and had a chat about it to the kids and made up our minds that we wanted to do it.
“We didn’t have a plan but we decided that if we didn’t go, we’d spend the rest of our lives thinking about the missed opportunity.”
The family left Scotland in the middle of February for what turned out to be quite the adventure.
Their tour included South America, North America, Peru, Mexico, the Galapagos Islands, a road trip across the States and travelling around South East Asia.
They also visited Japan and Hong Kong.
“The boys were 14 and 12 at the time,” said Lynne.
“We started off at Machu Picchu; I knew in that moment that we had made the right decision and the boys were very relaxed about the whole thing.”
The family stayed mainly in youth hostels during their travels and had their fair share of hair-raising experiences.
“We had the backpacker experience – we certainly didn’t stay in lots of lovely hotels,” said Lynne.
“It was very much on the hoof.
“One experience in particular stands out. We were on a bus in Peru. The driver actually fell asleep at the wheel and he only woke up when the bus went off the road.
“Thankfully it wasn’t in a section of road where there were massive canyons either side!
“We spent the rest of the four-hour journey counting the memorial crosses at either side of the road to try to distract ourselves.”
The family also managed to miss an earthquake that hit Ecuador one hour after they left the west coast.
They were then told that they could be in the path of a tsunami.
“It was pretty scary, but at the time you just get on with it,” said Lynne.
“We also had lots of amazing experiences.
“The boys got a pretty impressive biology lesson on the Galapagos Islands, where we were able to show them Darwin’s finches.
“Cambodia was absolutely fascinating, and I also learned to weave whilst travelling through Asia.
“I didn’t speak the language and the women who taught me didn’t speak English.
“But somehow I got the hang of it.”
Lynne has continued to weave upon her return to Scotland, and is due to travel to Mexico next month after receiving funding from the British Council as part of its Crafting Futures scheme.
The initiative supports crafts around the globe.
But how did the family fare upon returning to the UK?
“It was a big shock to the system to be home; Alex returned to the oil industry and the boys went back to school,” she said.
“I think the experience has brought us a lot closer as a family.
“Travelling together is a concentrated version of day-to-day life.
“There are no escape valves like work or school and you have to be quite confident in your relationships.
“The boys were at an age where they were starting to wonder what it meant to be an adult.
“They were starting to ask questions and we had some rather entertaining conversations.
“That closeness has continued in the UK.
“If the boys decide that they don’t want to travel in the future, I can be content with that because they’ve had the experience and made that decision for themselves.
“I would say that if you want to travel and have the funds to do so, don’t hesitate.
Hong Kong’s billionaire Cheng family, which controls a real estate and jewelry empire, is exploring a bid for European fuel supplier Varo Energy BV, people with knowledge of the matter said.
The companies have held talks about a deal that could value Varo Energy, backed by investors including Carlyle Group LP, at about 2 billion euros ($2.3 billion) including debt, according to the people. No final agreements have been reached, and there’s no certainty the negotiations will lead to a transaction, the people said, asking not to be identified because the information is private.
Tycoon Henry Cheng has been pursuing acquisitions as he leads family-owned conglomerate Chow Tai Fook (Holding) Ltd. beyond its property roots. The group completed its first foray into Australian utilities with the 2017 purchase of power producer Alinta Energy Holdings Ltd., Bloomberg-compiled data show. Last month, an arm of the family’s New World Development Co. agreed to buy a Hong Kong insurer for $2.75 billion.
Reggeborgh, a private Dutch investor, and Vitol Group, the world’s biggest independent oil trader, also own stakes in Varo. In April, the company — which has a head office in Switzerland and is registered in the Netherlands — scrapped plans for an initial public offering due to unfavorable market conditions.
Representatives for Varo, Carlyle, Reggeborgh and Vitol declined to comment. A spokeswoman for the Chengs’s publicly traded retail business, Chow Tai Fook Jewellery Group Ltd., said she couldn’t immediately comment on behalf of the family. A representative for their listed property flagship, New World Development, didn’t immediately respond to emailed queries.
The proposed Amsterdam Stock Exchange listing may have valued Varo at as much as 2 billion euros, people familiar with the matter have said. Each of the company’s three shareholders had planned to sell a third of their shares.
Varo runs hundreds of fuel stations throughout the Netherlands, Belgium, France and Germany. It also owns stakes in two refineries and controls about 3 million cubic meters of fuel-storage capacity, according to its website. The company had $13.4 billion of revenue in 2017.
Energy service giant Wood has won an award for its commitnent to exporting engineering expertise to China.
The Aberdeen-based company was named Scottish exporter of the year at the China-Scotland Business Awards in Edinburgh.
Organised by the China-Britain Business Council, the awards recognise innovation and export successes among Scottish firms doing business in China, and the role they play in encouraging other firms to seize opportunities in the Far East.
The winners were announced at the Chinese Burns Supper 2019 in the Waldorf Astoria hotel.
Wood chief executive Robin Watson said: “Wood’s history in China can be dated back to the early 1930s. This award recognises not only our business success to date, but our commitment to expanding our portfolio in the region in future.
“Wood provides full asset, life cycle services in the refinery, petrochemicals, chemicals and power industries in China, utilising our global infrastructure and engineering expertise to leverage our business in the local energy market and beyond.”
Wood, which employs about 60,000 people across operations in more than 60 countries, has worked on a string of projects in partnership with Chinese businesses.
It is currently working with China General Nuclear Power Corporation, which aims to build a Chinese-designed reactor at Bradwell, Essex, in a joint venture with EDF Energy.
In petrochemicals, Wood has managed four coal chemicals projects in China during the past decade.
A community-conscious oil and gas firm has stepped in to ensure children get to a Mearns school safely.
About 20 youngsters attending Redmyre Primary in Fordoun walk along Old Aberdeen Road on their way to and from school.
However, with the demolition of Abbeyton Bridge and the temporary closure of Fordoun bridge, there has been a significant increase in traffic on the road, including heavy goods vehicles, using it as an alternative route.
The 170-year-old Abbeyton structure was dismantled as it was threatening to collapse on to the railway line below, and a wall collapse has made the Fordoun llink unsafe.
This has sparked fears in the community that pupils could be endangered by passing vehicles.
Now subsea company Neptune Marine Services, which is based in the village, has stepped forward to help allay those concerns.
The firm has presented high-viz vests to the school for pupils.
Dave Gaulding, one of the parents of the group affected, said the firm had always been quick to support the community.
He said: “We’re delighted because it will help increase safety on the road and it also goes to show just how active Neptune is in the Fordoun community.
“The firm regularly makes a donation to our Christmas party in the village hall and this was when they found out about the issue.
“It’s very nice to see a big company play their part.”
Neptune said it was important to maintain “close links” with the village, where its factory is based.
A spokesman said: “Our health, safety, environment and quality manager recently gave a talk with pupils giving an insight into the oil and gas industry and what services Neptune provide. Due to the recent road closures and increased traffic in the area, Neptune were delighted to provide high visibility vests for the pupils to wear going to and from school especially in the winter months when visibility is poor.”
A spokeswoman for Aberdeenshire Council said: “We are continuing dialogue with the owner of the retaining wall to agree a way forward and meantime the road and the bridge remain closed.
“There’s no further update than that at this point. We would encourage drivers to take caution and care when passing the surrounding areas of any of our schools.”
Aberdeen University has announced plans to “export its expertise in teaching and research” by creating a new £100 million campus in the Middle East.
The university’s principal, Professor George Boyne, hailed plans for the purpose-built campus in Qatar as a “milestone” for the historic institution.
The site in al Daayan, near Doha, will be funded by the al Faleh Group – which is dedicated to promoting education in the country, and has partnered with Aberdeen University for the project.
The move follows the creation of a first campus in Doha in 2017, which has attracted more than 400 students to take on business-related degrees.
The new site will measure more than 12 acres, and will provide space to expand the range of programmes offered to include science, technology, engineering and mathematics.
There will also be space for lessons in medical sciences, law, politics and international relations.
Prof Boyne said: “This is another milestone in our successful partnership with the al Faleh Group.
“Throughout its long history the university has taken pride in being open to the world, and our campus in Qatar is testament to our international outlook.
“This has resulted in the university exporting its expertise in teaching and research to new areas, and assisting Qatar in its plans to deliver the highest quality education to its citizens.”
Sheikha Aisha bint Faleh al Thani, chairwoman and founder of the al Faleh Group, said she was “extremely proud to be associated with such a prestigious university”.
She added: “Our student numbers are growing beyond expectations and this is matched by ever-increasing demand for new academic disciplines.”
As he visited Qatar for the launch, Prof Boyne met students and took part in question and answer sessions where the range of courses was discussed.
Ajay Sharma, UK Ambassador to Qatar, said: “The academic links and co-operation between Qatar and universities in the United Kingdom are historically strong, but with this development of a purpose-built campus opening in Qatar, there will be even greater opportunities for people resident here and from across the world to take advantage of academic excellence.”
Royal Dutch Shell is set to unveil its highest annual profits for four years next week, but fourth-quarter figures are expected to take a hit from recent oil price falls.
Results on Thursday are expected to reveal a 39% surge in underlying earnings to £16.8 billion for 2018, up from £12.1 billion in 2017.
This would mark its highest profits since 2014 and comes after Shell hailed one of its “strongest ever quarters” for the three months to September as higher oil prices drove earnings up 37%.
But fourth-quarter results may take the shine off the performance after oil prices went into reverse since reaching a heady high of nearly $87 per barrel in October.
Having steadily rebounded since 2016 after a long and painful rout, the crude price rally finally ran out of steam last autumn amid fears of a slowdown in demand as global growth eases, combined with rising inventories.
The price of Brent crude ended the year lower than it did at the start – closing the year at $54 a barrel compared with $67 in January.
The Share Centre said: “The oil major has been reporting great numbers as average oil prices made steady progress since the lows of 2016.
“However, given the anticipation of higher supplies from shale and Iranian oil supplies not expecting to fall back as dramatically as previously expected, oil prices during the final quarter wobbled, which will no doubt hit Shell’s numbers.”
In the third quarter, Shell reported underlying earnings, on a current cost of supplies basis, of £4.3 billion for the three months to the end of September.
Dramatic cost-cutting has also been giving Shell a boost, while it has likewise been selling off assets.
Boss Ben van Beurden has been focusing on an ambitious cost-cutting drive and a £23 billion divestment initiative since the industry has been buffeted by the 2014 oil price crash.
By November, it had so far completed £21.5 billion of the programme and has signed off on another £3.1 billion.
It also announced it would buy up to £1.9 billion of shares in the second tranche of its buyback programme.
The group first launched the share buyout plan in July, having promised the move to investors since taking over rival BG Group in a mammoth £41 billion deal in 2016
Sinopec has finally revealed how much money it lost on bad oil bets.
The refining giant, officially known as China Petroleum & Chemical Corp., said on Friday that its trading unit had an operating loss of about 4.65 billion yuan (£526 million) last year after misjudging prices and using “inappropriate” hedging techniques.
It’s the first time the company has given the size of the loss at the unit, known as Unipec, which was first reported in December and led to the suspension of two executives. While it’s a smaller hit than some had speculated, it’s still a massive mishap that eclipses China Aviation Oil’s infamous $550 million blunder in 2004.
The troubles at Unipec were unearthed as prices began to crash in the final quarter of last year. Brent crude, the global benchmark, tumbled from nearly $87 in October to just below $50 after Christmas.
“The company discovered in its regular supervision that there were unusual financial data in the hedging business of Unipec,” Sinopec said in a Hong Kong stock exchange filing. “Further investigations have indicated that the misjudgment about the global crude oil price trend and inappropriate hedging techniques applied for certain parts of hedging positions” resulted in the losses.
There have been bigger oil trading busts. Metallgesellschaft AG suffered a $1.2 billion loss in 1994 when a hedging strategy failed. China Aviation Oil fell foul of a surge in oil prices to a record that forced it close speculative trades when it couldn’t meet funding requirements.
Separately on Friday, Sinopec said it estimated full-year net income rose 22 percent to 62.4 billion yuan, citing Chinese accounting standards. That compares with the 70 billion average forecast by 12 analysts compiled by Bloomberg, which uses international standards.
Oil companies will pay their fair share of the multi-billion pound UK North Sea decommissioning bill, a trade body has said.
Industry will cover costs “in the first place” and is determined to dismantle more efficiently, said Mike Tholen, upstream policy director at Oil and Gas UK.
But it has emerged that one operator is likely to receive more than £300 million in tax relief because it is meeting another firm’s share of decommissioning costs.
Relief deeds – introduced in 2013 − guarantee support for companies if their partners cannot stump up funds for the removal of infrastructure.
The UK Government’s intention was to provide certainty and encourage investment in exploration and production.
HM Treasury had entered into 86 deeds by March 2018, according to a new National Audit Office (NAO) report.
Decommissioning tax reliefs are expected to cost the government £24 billion.
Under the current regime, companies can claim back some of the taxes paid on profits to help offset decommissioning costs.
In mid-2017, the Oil and Gas Authority estimated that almost £60bn would be spent on North Sea dismantling, but vowed to slash the bill by 35%, reducing the burden on taxpayers.
NAO warned that taxpayers are ultimately liable in the event of a company going bust.
“Should an operator become insolvent or lack the financial resources to carry out decommissioning, the liability reverts to any joint or previous owners of the asset,” the report said. “If none exist, then the liability falls to the government.”
But Westminster believes the risk is low, because 80% of assets are currently, or have been, owned by larger oil companies.
The OGA expects operators to incur “almost all” decommissioning costs in the next 20 years.
Mr Tholen said: “Decommissioning is a normal part of the lifecycle, the cost of which is in the first place paid for by industry.
“Industry is wholly committed to decommissioning assets efficiently, cost-effectively and in a safe and environmentally responsible manner.
“We are all aligned in the need to control costs and deliver long term value by extending the productive life of the basin.”
A UK Government spokesperson said: “By providing tax relief on decommissioning we are attracting continued investment into our reserves – supporting jobs, boosting the economy and protecting our energy supply.”
Total will lead the way with exploration drilling this year, according to analysis from Westwood Global.
The consultancy reports the French energy firm will drill a total of 22 high impact exploration wells, making it “the company to watch” in 2019.
Total is by far the highest, followed by Norway’s Equinor, ExxonMobil and Cnooc International.
Westwood said eight of Total’s wells are in frontier areas.
North-west Europe, Central and Southern America are the “regions to watch” with 22 high impact wells each.
The South American nation of Guyana, where more than five billion barrels have been discovered since 2015, will play a key role in future exploration according to Westwood.
Up to 90 projects could reach sanction globally, which could ease pressure on the oilfield services market.
Westwood Global Energy Group
Keith Myers, Westwood’s president of research, said: “This will bring some relief to the hard-pressed supply chain still struggling with overcapacity in most asset classes and many suppliers struggling with commercial terms.
“Expect to see increased contracting in 2019 but limited price inflation.”
Spending will only see a “modest” increase this year, he added.
Despite larger exploration and production companies being in “rude health” last year, spending will only increase by around 10% in 2019 as “caution in boardrooms remains”.
An offshore worker has died after falling into the North Sea.
A massive search and rescue operation was launched yesterday after the man – who was working in Culzean field – was reported missing at 11am yesterday.
The man in question was working on the Maersk Highlander jack-up rig, operated by French oil firm Total within the gas condensate field in the East Central Graben area of the central North Sea.
His body was later found, and police confirmed his family have been informed.
Total confirmed the incident was not caused by an accident aboard the drilling rig.
A spokesman for Total said:“Following reports of a missing person from the Maersk Highlander yesterday, a subsequent search and rescue operation sadly recovered a body from the sea.
“Total is assisting Police Scotland with their investigation into the incident, which was not caused by a workplace accident.
“Our thoughts at this time are with the family and friends of the person involved.”
Culzean lies around 145 miles east of Aberdeen.
A police spokeswoman said last night: “Police Scotland can sadly confirm that the body of a man was recovered in the North Sea on Thursday, January 24 during efforts to locate a person that had been reported missing.
“Emergency services were contacted at around 11am and a subsequent search was launched led by the Maritime and Coastguard Agency (MCA).”
The UK’s fiscal regime for decommissioning is the envy of the world, an analyst has said.
Neivan Boroujerdi, a senior analyst with Wood Mackenzie’s Europe upstream team, said other petroleum nations looked to Britain for guidance.
He was speaking after a new report said UK taxpayers could be lumbered with a huge decommissioning bill due to tax reliefs.
Mr Boroujerdi said: “The UK is at the forefront of decommissioning globally. The maturity of the North Sea was brought into sharp focus by the latest oil price drop. The UK accounted for 16% of the estimated 472 fields that ceased production in 2013-2017.
“Around a third of upcoming global decommissioning activity in the next decade will be in the UK. This gives the country the opportunity to further develop expertise and export that around the globe.
“We already lead the world in fiscal terms and regulations governing decommissioning – others look to the UK for guidance,” he said.
“However, there is huge uncertainty over timing. The industry has made progress on reducing operating costs, helping prolong the life of facilities, for example. The M&A market has evolved too – new entrants are investing. And the introduction of Transferable Tax History (TTH) has the potential to get assets into the right hands.”
Boroujerdi added that the potential exists for further cost reductions.
“Recent decommissioning estimates have come down,” he said. “Project execution has improved thanks to batch programmes, for example. New technology also has a part to play.
“It is important to remember that while the UK is a leader in decommissioning, 85% of overall decommissioning activity has yet to take place, particularly for big facilities. With each successful decommissioning project, lessons will be learned that can be applied to future activity. We are on the cusp with Brent’s decommissioning programme.
“Keep the big picture in mind too. The sector has contributed much to the UK since the 1960s – tax revenue, energy security and employment. The OGA and OGUK’s Vision 2035 sets out an ambitious target to maximise economic recovery from the North Sea – part of which is to increase our global oil and gas exports, making Aberdeen and the UK a hub of global industry excellence – decommissioning excellence has a role in this.
“Ultimately Wood Mackenzie believes the industry will deliver more in future tax revenues than it will pay to cover decommissioning activities – anywhere between £30 billion and £50 billion. And that excludes discoveries that have yet to be found, and additional projects that will prolong the life of some facilities.”
FrontRow Energy Technology Group has secured a follow-on investment worth £10 million from the Business Growth Fund (BGF) to drive forward its expansion.
Bosses have also committed a further £1m to increase their foothold in the oil and gas technology market.
Aberdeen firm FrontRow is the brainchild of former Expro Group chief executive Graeme Coutts.
He teamed up with other industry veterans, including ex-Weatherford International chief technology officer Stuart Ferguson – now FrontRow’s chief executive – to plough cash into businesses specialising in technology and expertise to drive down costs and extending oil and gas production offshore.
The latest cash injection into FrontRow comes just two years after the management team and BGF invested a total of £13m to give the group more “horsepower”.
FrontRow’s portfolio includes Well-Sense Technology, Unity, ClearWell Oilfield Solutions and Pragma, all based in the same incubator facility in Dyce.
Mr Ferguson said: “FrontRow has grown significantly since BGF’s original investment.
“The funding helped us to build our existing businesses, to strengthen our presence in the market and to acquire or start new businesses to complement our offering.
“We’re delighted to continue our partnership with BGF, whose ability to provide follow-on funding to its portfolio companies is great for us.
“We look forward to realising more of our ambitious growth plans together.”
Mike Sibson, an investor in BGF’s Aberdeen office who sits on the board of FrontRow, said: “FrontRow has expanded substantially over the past two years and has engineered some really innovative developments, both in terms of business expansion and through pioneering technologies.
“The business model, focusing on driving down customer costs, is exactly what the modern North Sea and wider global oil and gas industry needs, and the technologies will play a crucial role in the future success of the
“The team has a wealth of experience in building high-value businesses and we’re looking forward to the continuation of our relationship with them over the next part of their exciting journey.”
The new private-equity backed owner of Survivex has acquired a Tyne and Wear-based virtual reality firm.
Newcastle-headquartered energy training firm 3T Energy Group today announced the purchase of software specialist Neutron VR in a bid to strengthen its technical capabilities.
The deal will see Neutron VR’s 16 staff drafted in to 3T Energy Group’s offices.
North-east offshore survival training company Survivex was acquired by rival 3T Energy in November.
The firm’s bosses said the takeover of Dyce-based Survivex would create a company with 300 employees and revenues of 2019.
The group was launched earlier this year by combining AIS Training and simulator developer Drilling Systems, with investment coming from Blue Water Energy.
Survivex was founded in 2011 by businessman and majority shareholder George Green.
Paul Stonebanks, president of 3T Energy Group and founder of AIS, said: “Neutron is world-class at what it does and we are delighted to add its expertise to the 3T Energy Group. This will be a key anchor business to help achieve our strategic vision for the Group.
“The team within Neutron will help us develop cutting-edge, technology-driven, virtual reality products and services for the global energy sector, which will truly revolutionise the way training is delivered.
“Products such as augmented reality, mobile apps and integrated software platforms have huge potential to make training more engaging, more cost-effective and much easier.
“Using technologies like this, we intend to help the global energy sector work smarter, safer and more efficiently.”
Neutron VR was set up in November 2014 offering its services to the commercial sector.
Dinesh Kumar, co-founder of Neutron and chief technology officer at 3T Energy Group said: “We had been working closely with AIS Training for a number of years, helping it develop unique training and competency management systems so knew the company well.
“We were very much at a crossroads with Neutron and needed to secure additional investment if we wanted to grow further. However, when the option to join 3T came up instead it provided us with a fantastic opportunity to be part of a global group with technology at its heart.”
Flybe suffered a turbulent day in the City after reassuring the market over its ability to keep flying from airports including Aberdeen and Inverness.
The regional airline is on the brink of a takeover by a consortium – led by Virgin Atlantic and Stobart Group – pumping millions of pounds into the business to keep it from going bust.
Flybe said yesterday it had already received the first £10 million in crucial funding as part of a restructured takeover offer.
It also said it continued to receive payments from its credit card acquirers – the financial institutions processing credit or debit card payments on its behalf.
But there is unrest among investors over the 1p per share sale to the Connect Airways consortium.
Flybe’s biggest investor – London-based asset manager Hosking Partners – is reportedly considering legal action, having accused the company’s directors of breaching their obligations to shareholders.
It is understood Hosking Partners wrote to Flybe’s directors expressing concerns that the carrier had allowed a false market to develop by failing to notify the City of its financial position quickly enough – a letter that was also sent to regulators.
Flybe’s shares have taken a pummelling since news of the takeover emerged earlier this month.
The stock fell sharply again yesterday, down by more than 50% at one point.
There was a recovery by market close but it was not enough to offset the damage, with the shares ending the session 38% weaker at 4p.
Flybe, which put itself up for sale in November after warning over profits, is to be combined with Stobart Air in a joint venture.
Virgin and Stobart will each own 30% of the new business, while a third consortium partner, Cyrus Capital Partners, will have 40%.
The combination of Flybe and Stobart Air and a “deep partnership” with Virgin will see flights currently operated by Flybe taking off under the Virgin Atlantic brand.
Under a rescue plan unveiled by Flybe last week, the consortium partners will pay £2.8m for the business instead of the £2.2m that was previously agreed.
The new package also included £10m of immediate funding – from a revised bridging loan worth a total of £20m – to help the airline survive until the slated takeover completion date of February 22.
Flybe’s owners-in-waiting have pledged a further £80m of funding to support their growth plans for the carrier, whose route network includes a raft of flights from Aberdeen and Inverness.
Trade unions have already raised concerns over the impact of Flybe’s sale on the carrier’s 2,300 employees.
Exeter-based Flybe has also agreed with Vueling Airlines – a subsidiary of International Airlines Group – to sell its slots at London Gatwick Airport for £4.5m.
This cash will be paid in two tranches, one due in the next few days for slots to be used this summer, and the second in June for slots to be used during winter.