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energy

Markets

Carlyle Group Raises $2.5 Billion for international energy deals

Carlyle Group LP has raised $2.5 billion for an international energy fund as the private equity investor bolsters its oil and gas firepower after the collapse in prices. Marcel van Poecke, head of Carlyle International Energy Partners, said the Washington-based firm closed the fund after commitments from 160 investors. The new fund, which will invest exclusively outside the US, will increase Carlyle’s war chest for energy deals to over $10 billion, the firm said. “This is one of the best periods, if not the best, to invest in global energy,” van Poecke said in an interview. Carlyle joins other private equity firms, including Blackstone Group LP, KKR & Co. and Apollo Global Management LLC, in raising extra funds for energy deals as oil and natural gas companies struggle to stay afloat.

Markets

US stocks fall as oil price continues to slide

A day after their biggest gain in six weeks, US stock indexes mostly fell yesterday as oil continued to slide and investors fretted over when the Federal Reserve will raise a key borrowing rate. Low rates have helped stocks soar over the past six years. The Fed kicked off a two-day meeting yesterday to discuss rates, and will release a policy statement today. Losses were small, but spread across industries. Nine of the 10 sectors of the Standard & Poor’s 500 index dropped, led by a 1.2% fall in raw-material companies. Randall Warren, chief investment officer of Warren Financial Service, said he is not worried about higher rates, but is bracing for more price swings nonetheless.

Renewables/Energy Transition

Debate blows hot and cold over windfarms issue

A row broke out last night after a survey showed that the majority of people living in the north and north-east of Scotland support wind power. The industry claimed the results shot down the “vocal minority” of objectors who claim that most Scots are opposed to giant turbines dotting the countryside. But anti-windfarm campaigners said the findings had to be “taken with a bucket of salt” as they did not separate those who are “adversely affected”, mainly people living in rural areas and communities targeted by wind developers.

Renewables/Energy Transition

Report shows influence of environment on subsea cable lifecycles

A report has been published on the performance of subsea cabling in high energy environments to support the development of commercial wave and tide energy sites. The aim of the analysis, by the European Marine Energy Centre (EMEC) and The Crown Estate, is to improve the industry’s understanding of how best to specify and manage subsea cables. Tests were done by investigation how the cables installed at EMEC test sites in Orkney have been performing since installation.

Renewables/Energy Transition

Scotland sees rise in community power output

The amount of electricity produced by projects owned by local communities has increased by more than a quarter in the last year, the Scottish Government has revealed. Ministers have set the target of having plants producing 500 megawatts (MW) of power in communities and local ownership by 2020. The latest figures show such schemes can generate 361MW, up from 285MW in the previous year. The increase was revealed by energy minister Fergus Ewing ahead of the Community and Renewable Energy Scheme (CARES) conference in Stirling.

Oil & Gas

Expert help for African industry

Scotland’s oil and gas industry is going on a trade mission to Africa this week in answer to a call for support from a former president of Mozambique. The east African nation and its neighbour Tanzania have some of the largest offshore gas fields in the world, but with no local supply chain and a lack of skilled workers, they are ill-equipped to recover the hydrocarbons. Operators in East Africa, including Anadarko, ENI, BG, Shell and Petrobras, are prepared to step in and spend about £1.35billion on developing the fields, believed to contain 150trillion cubic feet of gas.

Other News

Warning on Longannet future

The Scottish Government will do everything in its power to prevent the premature closure of Longannet, the Deputy First Minister has pledged. John Swinney was speaking in advance of a visit to the troubled Fife power station, which will close by the end of March next year unless it secures a short-term National Grid contract. A decision on the contract, which is to help maintain voltage levels in the electricity supply from April 2016 to October 2017, is expected by the end of the month. The Scottish Power-operated coal-fired station is under pressure from new European Union environmental legislation and carbon taxation combined with higher transmission charges to connect to the grid due to its location in Scotland.

Markets

Weir Group sees stocks boosted

Oil and Gas services firm Weir rose by nearly 5% amid speculation it could be the subject of a break-up bid from a US private equity firm. The stock, which has hit turbulence in recent months due to the fall in oil prices, was 85.5p higher at 1824.5p. Other big risers included Taylor Wimpey after the company this week joined rival firms in reporting a strong start to the important spring selling season.

Oil & Gas

Mexico aims to tap into North Sea oil success

The President of Mexico said his country was keen to learn from the expertise of the North Sea oil and gas industry on a trip to Aberdeen yesterday. A heavy police presence, a civic reception and some of the country’s top politicians greeted Enrique Pena Nieto in what was his only commitment outwith London during his stay in the UK. In the grand surroundings of the Town and County Room in the town house, President Nieto signed memorandums of understanding with the UK Government to forge closer links on energy and climate change. Lord Provost George Adam and Secretary of State for Scotland Alistair Carmichael welcomed the Mexican delegation to the north-east, while UK energy minister Matt Hancock described it as the dawn of “an era of closer collaboration”. President Nieto said his country had “enormous” reserves of oil and gas, but was “not capable of exploiting them”.

Other News

Pemex loses bid to recover stolen gas proceeds from Shell, BASF

Pemex Exploracion y Produccion can’t recover hundreds of millions of dollars lost on Mexican condensate smuggled across the Texas border by bandits and sold to Shell Chemical LP, ConocoPhillips Co., BASF Corp. and other buyers that didn’t know the feedstock was stolen, a federal appeals court ruled. A Houston federal judge threw out the claims last year after finding Mexico’s national oil company waited too long to pursue US buyers of its stolen natural gas liquids, after it failed to halt the thefts on its side of the border.

Opinion

Opinion: The new era of transformation in energy

What a difference a year makes. Twelve months ago the shale revolution in the US was changing everything, from manufacturing competitiveness to traditional import/export flows and even longstanding geopolitical arrangements this side of the pond, shale exploration was pretty much on each EU country’s agenda, with shale gas often seen as the only way out of Russian dependency. Now we are in the middle of another quantum shift which is transforming everything again. Crude prices have plunged, Russia is in recession, experts are declaring shale investments dead in the water (too soon in my view) and government policies favouring renewables are under new scrutiny, as economics suddenly favour dirtier coal and gas. Whether you blame technology, politics, softening demand or a mix of all three, these ructions are testament to the dynamic nature of energy markets and the huge risks that emerge in a period of profound volatility.

Other News

Mexican President in visit to Aberdeen over energy sector

The President of Mexico will visit Aberdeen today to sign a memoranda of understanding on collaboration in the energy sector. Enrique Pena Nieto will be joined by Scottish secretary Alistair Carmichael, UK energy minister Matthew Hancock and Scotland’s external affairs secretary Fiona Hyslop on the final day of his state visit to Britain.

Renewables/Energy Transition

‘Misconceptions’ about wind power

The UK public believes that wind power subsidies paid by consumers are many times higher than they actually are, according to polling for the industry. A survey questioned 2,000 people for industry body RenewableUK about what they thought payments for wind farms added to fuel bills, and found the average estimate was £259 for a typical £1,300 dual-fuel energy bill. But the industry said the actual cost of wind power subsidies from domestic energy bills was around £18 a year.

Analysis

Oil May Fall Again Says Analyst Who Predicted ’09 Rebound

Oil prices could drop again later this year as a supply glut persists, according to Jason Kenney, a Banco Santander SA analyst who accurately predicted a rebound in prices after the 2008 slump. The current oil shock caused by the boom in U.S. shale production is reminiscent of the mid-1980s, when development of fields in the North Sea and the Gulf of Mexico caused a supply glut, Kenney, the head of European oil and gas equity research at the Spanish bank, said by phone from Edinburgh Thursday. It differs from the 2008 collapse, which was caused by slumping demand in a recession, Kenney said.

Oil & Gas

Russia could cut gas off this week

Russia could cut off supplies to neighbouring Ukraine by the end of the week if it does not get further payments from the country, a spokesman for the gas company Gazprom has said. Sergei Kupriyanov said in televised remarks that “if no new funds are received from Kiev, then naturally we cannot continue delivering gas to Ukraine”. He did not specify the sum. Following a bruising dispute over prices and debt that raised fears of supply disruptions in Europe, Russia and Ukraine signed a deal in October requiring Kiev to pay in advance for gas shipments. Mr Kupriyanov said that discussions with Ukraine’s gas company, Naftogaz, were ongoing, but gave no other details about the talks.

Renewables/Energy Transition

Solar ‘misses out’ on energy deals

Cheap and popular solar power has lost out in an auction of contracts for green energy projects worth more than £315 million, the industry has claimed. The first auction of its kind has awarded subsidies, paid from consumer bills, to 27 renewable electricity projects which together could power 1.4 million homes - equivalent to all the households in Wales. But just five solar farms, which were competing with other “established“ technologies such as onshore wind and hydro for a share of a £50 million pot, have secured contracts for 71 megawatts (MW) of power. Fifteen onshore wind farms, providing 10 times as much capacity (749MW), have secured subsidies in the auction. Offshore wind was competing as a less mature technology in a separate part of the auction which accounted for the majority of the £315 million, and secured contracts for two wind farms with a combined capacity of 1,162MW.

Oil & Gas

Mexican President to sign energy collaboration agreement on visit to UK

The Mexican president will visit Aberdeen next week to sign an energy collaboration agreement, it has been confirmed. Enrique Pena Nieto will formally announce the memoranda of understanding at a meeting with North Sea leaders in the Town House on Thursday. He will be hosted by Scottish Secretary Alistair Carmichael and Energy Minister Matt Hancock. In the afternoon, he will visit Robert Gordon University to meet academics and view a presentation on the energy sector, before viewing a demonstration of the Drilling and Advanced Rig Training Simulator.

Markets

Ithaca shares plummet on news of Greater Stella delay

More than £85million was wiped off the value of North Sea oil firm Ithaca Energy yesterday after it said start-up from its Greater Stella Area (GSA) project would be severely delayed. Investors were also panicking after the Aberdeen-based company revealed its latest GSA problems would cost it millions of pounds in extra costs. Ithaca, whose share price plummeted more than 27%, does not now expect to benefit from any GSA output until the second quarter of next year, having previously anticipated a boost during 2015. The change of plan was prompted by modifications to a floating production platform – FPF-1 – in Gdansk, Poland, taking longer than expected.

Other News

EU plan to merge 28 energy markets

The European Union’s executive has unveiled a vast plan to boost co-ordination between the EU’s 28 national energy markets to wean Europe off unstable Russian gas supplies and provide cheaper energy for consumers. European Commission vice president Maros Sefcovic today called it “undoubtedly the most ambitious energy project” since the inception of the EU over half a century ago. He believes that improving links across borders in Europe’s energy grid could save businesses and consumers up to 40 billion euro ((£29.3 billion) a year. A more energy-independent Europe will also increase the EU’s political options in eastern Europe.

Renewables/Energy Transition

Call for rethink on marine energy funding

The main advisory body for the marine energy industry has called for a rethink of the way government funding is dished out to the struggling wave and tidal sector. In a new report, the Marine Energy Programme Board (MEPB) stressed the need for sustained financial support to commercialise the sector, as well as a “joint vision” of the industry’s future. The industry, which employs about 1,700 people, has suffered numerous setbacks in recent months. In December, Edinburgh-based Aquamarine Power said it would “downsize” its business after posting losses of £16.5million for the year to March 31, and a month earlier wave-power firm Pelamis went into administration after failing to secure enough funding for research and development.

Other News

Ofgem ‘must get its act together’

The energy market regulator, Ofgem, has been sharply criticised by MPs for failing to ensure consumers are getting the best value for money. The Commons Energy and Climate Change Committee said new price caps intended to curb the costs of distributing and transmitting gas and electricity were too generous while performance targets were too low. Committee chairman Tim Yeo said a warning by Ofgem chief executive Dermot Nolan that it could be eight years before it was clear whether the new system was delivering value for money was too long for consumers to wait. The so-called “network costs” currently account for around 23% of a dual fuel (gas and electricity) bill.

Oil & Gas

Target Energy files lawsuit against two companies over alleged breach

A US oil and gas firm has mounted action against two energy companies over an alleged breach of obligation. Target Energy Limited’s subsidiary TELA Garwood LP has filed a lawsuit in Harris County District Court, in Houston, Texas, against Victory Energy Corporation and Aurora Energy Partners. The law suit charge alleges that Aurora, acting through partner, Victory, breached an obligation to purchase some of TELA Garwood’s interests in the West Texas Fairway Project.

Renewables/Energy Transition

Solar industry powers ahead in Britain

The number of solar panel installations throughout the UK has almost doubled in a year, as householders and communities increasingly grasp the chance to generate their own power. There are now almost 650,000 installations ranging from large-scale solar farms in fields to schemes on homes, schools and police stations, with electricity-generating photovoltaic (PV) panels on one in every 50 households in Britain. Industry body the Solar Trade Association’s chief executive, Paul Barwell, puts the popularity of solar down to falling product costs, easy technology and financial benefits, with home owners receiving “feed-in tariff” payments for power generated.

Markets

Energy rally sends US stocks higher

A late rally led by energy companies pushed US stock indexes higher yesterday after the market flitted between small gains and losses for most of the day. Stocks opened higher, then moved down, then back up as investors seemed unable to make up their minds. A pair of weak reports on the US economy fed the uncertainty. But oil prices ended up surging for a third straight day, and stocks of big producers jumped. All 10 industry sectors in the Standard and Poor’s 500 index rose. Exxon Mobil rose 2.5% after reporting better-than-expected earnings. Chevron jumped 3.4%. Both companies are members of the Dow Jones industrial average.