Daily Archives: April 23, 2009

Ed Crooks

The British government has launched what it descibes – with good reason – as “the most environmentally ambitious coal conditions of any country in the world”. As arguments over the future of coal power rage worldwide, particularly in the US, Britain’s Labour government has set a lead that it hopes will be followed in China, India and America.

It has made a commitment to “clean coal” technology – power stations fitted with equipment to capture and store their carbon dioxide emissions – which means that an important part of Britain’s future energy security and contribution to the fight against climate change will be based on an essentially unproven technology.

Kate Mackenzie

Sibir Energy shares were suspended on February 19 at 174.75p after the company  revealed that it had lent $325m to  its main owner and founder, Shalva Tchigirinsky.

BP-TNK yesterday confirmed it was offering 430p a share for Sibir.

And now… (from FT.com):

Gazprom Neft, Russia’s state-controlled oil major, has entered into a bidding war for a significant minority stake in Sibir Energy, the Aim-traded Russian energy group, offering 70p a share more than privately-owned rival TNK-BP, which is half owned by BP.

Renaissance Capital, the Moscow investment bank, said on Thursday it was offering to buy minority shares in Sibir Energy for 500p a share on behalf of Gazprom Neft, which is the oil arm of state-controlled monopoly Gazprom.

The move comes one day after Credit Suisse announced it was launching a book-build on behalf of TNK-BP for Sibir shares at 430p apiece, which closes on Thursday.

Related links:

Gazprom wades into Sibir bidding war (FT)
Hurry special offer for Sibir investors
(FT Alphaville)
Sibir Energy: The saga continues (FT Alphaville)

Kate Mackenzie

Latest stories on Energy Source:

US carbon giveaways, and spending the proceeds

The difficult balance of supply, demand and investment

Britain’s Budget: Energy and environment measures

Peak oil vs Newsweek

More rumblings over US carbon ‘protectionism’


Elsewhere:

Emissions: Nicholas Stern: We must not give in to pessimism ‘Unless we act as if we can sort this out you might as well just get a hat and some sun tan lotion and write a letter of apology to your grandchildren.’ (Guardian)

Uranium: BHP & Rio Tinto to benefit from uranium mining in Australia Uranium Associations predicts up to A$17bn to GDP by 2030 (SeekingAlpha)

Solar: Want to go solar? Cut your consumption first To minimise the cost of those panels (Intent)

Earth Day: Obama touts tyre inflation Undeterred by the Republican jeers he drew on the campaign trail, Obama repeats his favourite gasoline conservation hint (Huffington Post)

Cap and trade: Congress split on cap-and-trade’s impact on jobs Republicans say there is inadequate detail in the Waxman-Markey bill (CNet/CBS)

Kate Mackenzie

Investment in oil and gas production is a double-edged sword. On the one hand, falling investment, in response to falling prices, will likely contribute to an unwelcome sharp rise in prices as soon as demand recovers. The IEA, among others, has repeatedly warned of this in the past six months.

But big production projects are expensive and requires years of planning, so they are not easy to turn around (which is why they tend to be delayed rather than cancelled). So even though demand is falling, production capacity is, for the time being, continuing to increase – which is why we are seeing inventories rise.

Kate Mackenzie

While the Waxman-Markey bill is making its way through Congress, the administration has stopped short of endorsing it, although President Obama is calling for a carbon cap-and-trade scheme to be approved, which is part of the bill, to be approved.

However two crucial aspects of the cap-and-trade system are being worked out “behind the scenes“, writes the New York Times: the number of free permits that will be given away, and where the money raised from the initial auction of permits, expected to raise about $650bn – will be spent.

Under any sort of cap-and-trade scheme, government sets an overall limit on emissions while allowing companies to trade permits, known as allowances, to pollute. But the House draft does not address two central issues. First, it does not say how many of the allowances the government will give away, if any, and how many it will auction. Democrats from states dependent on coal and manufacturing are asking that a sizable portion of the allowances be granted free, to mitigate the costs of the carbon cap.

Second, the legislation does not say what will be done with the proceeds of any auction of permits, estimated in Mr. Obama’s budget proposal to be worth at least $65 billion a year.

Related stories:

Administration stops short of endorsing climate bill (NY Times)
The new US emissions cap-and-trade bill explained (FT Energy Source)

James Fontanella-Khan

Energy news from elsewhere:

- Margin squeeze to hit Reliance; ONGC profit to rise (Reuters)

- Obama urges passage of energy legislation (NYT)

- Suncor execs to take top posts in Petro-Can deal (Reuters)

- Chu, Jackson say clean energy can boost US economy (Bloomberg)

- Administration stops short of endorsing climate bill (NYT)

- Paladin Energy commissions second African uranium mine (Platts)

James Fontanella-Khan

Energy news from the FT:

- Peter Hambro Mining moves to LSE
PHM shares rose 3 per cent to 535p on the first day

- TNK-BP bids for minority stake in Sibir Energy
Analysts said it was not yet clear whether TNK-BP would wind a controlling stake

- RWE chairman announces surprise departure
Thomas Fischer said he plans to step aside due to personal reasons

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