Gallery: This week’s top five stories
The most read story this week on the Energy Voice website was on a call made by the boss of one of the world's largest energy services firms for the oil and gas sector to "reinvent" itself.
energy
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Go-ahead for nuclear technology
The first major permission has been given for the technology to build a new nuclear reactor. Horizon Nuclear power welcomed completion of the so-called regulatory justification process as it presses ahead with plans to build new nuclear power stations at Wylfa in Anglesey, North Wales, and Oldbury in Gloucestershire. The approval by the Government is the first to be put in place, with the final go-ahead expected in 2018.
Ovo Energy reduces gas prices
One of the smaller energy companies has slashed its gas prices by more than a 10th in response to falling wholesale costs. Ovo Energy said it was dropping the price of gas by 10.4%, a reduction which is more than double the largest cut announced by any of the Big Six major energy firms in recent weeks. The cut, which comes into effect on March 1, means that Ovo’s dual fuel standard variable tariff will be reduced by 5.8%, resulting in an average saving for customers of £65 a year.
Fergus Ewing gives backing for turbines at centre of judicial review
Scotland’s Energy Minister Fergus Ewing hopes four major wind arrays in the firths of Forth and Tay will be built despite a major legal challenge to their development. Bird protection charity RSPB Scotland sent shockwaves through the sector in Scotland earlier this month after a last-minute move to seek judicial review of Mr Ewing’s decision to grant consents for the Neart na Gaoithe, Inch Cape and Seagreen Alpha and Bravo arrays. It is understood the RSPB’s application will come before the courts for the first time in late May and there are concerns within the industry the legal process will prove both costly and lengthy.
Energy taskforce meets in Aberdeen
The new energy jobs taskforce, launched by First Minister Nicola Sturgeon earlier this month in response to tumbling oil prices, will meet for the first time in Aberdeen today. Chaired by Scottish Enterprise (SE) chief executive Lena Wilson, it will focus on jobs across the entire energy industry but with an initial emphasis on the oil and gas sector. Membership includes industry bodies and commercial interests as well as cross-government representation.
SSE cuts gas prices, extends freeze
Energy supplier SSE is to reduce household gas prices by 4.1% on April 30 before extending its energy price freeze until at least July 2016. The move is the latest cut by one of the UK’s Big Six energy firms, although SSE’s reduction will take effect much later than the company’s rivals, with British Gas due to cut its gas tariffs by 5% from February 27. In March, SSE pledged to freeze prices until January 2016 after putting up gas and electricity bills by 8.2% in the previous autumn. The UK’s second biggest supplier said today it has extended this guarantee, meaning its gas and electricity prices will not go up before July 2016 at the earliest.
Minister warns of oil jobs threat
The employment threat from the plunging oil price has produced the “the most serious jobs situation Scotland has faced in living memory” with urgent changes to the tax regime required, Holyrood’s Energy Minister said. Fergus Ewing demanded action from the UK Government as Energy Secretary Ed Davey was visiting Aberdeen to talk to leading figures in the North Sea oil and gas sector. With Chancellor George Osborne due to unveil his final budget before the election in March, Mr Davey suggested “we may well be able to have extra help for the North Sea”.
BP workers to find out jobs future
BP workers will tomorrow find out if cuts are to affect their jobs. The energy giant is soon expected to share findings of an exercise aimed at saving money.
Pan Orient Energy and Sea Oil delay deal
Pan Orient Energy has delayed a transaction with Sea Oil for the sale of a 50% interest in its subsidiary. Last year the companies agreed a deal worth $42.5million for the share of Pan Orient Energy (Siam) which holds a 100% interest in concession L53/48 in Thailand.
Labour calls for Ofgem to pass wholesale oil price fall on to consumers
Labour wants to give regulator Ofgem the ability to force companies to pass on falls in the price of wholesale oil and gas to consumers, which industry estimates claim could knock #136 off the average bill. E.ON also launched what it said was the country’s cheapest energy tariff, a new one-year fixed dual-fuel product with an average annual price of £923.
Energy pair lose £1.5billion in value
British Gas owner Centrica and rival SSE saw nearly £1.5 billion wiped off their combined market values today after Labour called for new powers to force energy companies to cut household tariffs. Labour wants to give regulator Ofgem the ability to force the companies to pass on falls in the price of wholesale oil and gas to consumers which it was today estimated could knock £136 off the average bill. It set off nervousness among investors about the uncertainty surrounding the sector in the approach to May’s general election, with party leader Ed Miliband already having committed to a price freeze.
FTSE 100 higher despite oil slide
Fresh pressure on energy stocks failed to derail the FTSE 100 Index today, even as oil prices slid further away from the $50 dollars a barrel mark. BP was 1.9p lower at 396.6p and Royal Dutch Shell dipped 15p to 2145p but the top flight index clung to positive territory - up 24.6 points at 6525.6.
Ewing to make call amid ‘oil crisis’
Scottish Energy Minister Fergus Ewing has called for a “stable and proportionate fiscal regime” to help the oil industry through the current crisis. As the price of Brent crude dipped below $50 a barrel for the first time since May 2009, it emerged that the Inverness and Nairn MSP is due to make a statement today in the Scottish Parliament on the future of oil and gas.
Energy services firm Hunting reveals plans to sell ship-broking division
Energy services firm Hunting yesterday unveiled plans to sell its ship-broking division to an employee benefit trust (EBT), with a deal expected to be signed in the coming weeks. City analysts had previously identified EA Gibson Shipbrokers as a “non-core asset” for the FTSE 250 firm, although the timing of the potential sale is understood to be unrelated to the recent plunge in the price of oil. The company said: “The transaction is expected to complete by the 31 March and is conditional on a number of matters including the management of Gibson finalising structure and funding.
Tamarack sees ‘record’ production rates
A project headed by Tamarack Valley Energy experienced a "record" exit production rate toward the end of last year. Canada-based Tamarack said its drilling program in the Wilson Creek contributed to a rise in production rates during the last two weeks of December. Rates averaged at 9,700 boe/d with all 10.9 net wells drilled in the fourth quarter were brought on production last month.