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Two years and one month after the death Muammar Gaddafi, the continuing power struggle in Libya is beginning to affect the oil market. So far the impact is slight, indicating the extent of OPEC’s spare capacity. The bigger risk will come if the instability spreads from Libya across North Africa or to other parts of the region. For investors, events in Libya are a reminder that any investments in the Middle East carry a large political risk. Read more

Nowhere is the failure of the talks between the international community and Iran over Tehran’s nuclear programme more welcome than in Riyadh. A fudged deal would have given legitimacy to the government in Tehran and confirmed the weakness of the strategic alliance between Saudi Arabia and the US.

More important still, it would have raised the prospect of the Saudis having to make serious cuts in oil production and exports to support the price of the output from Opec, the oil producers’ cartel. These are cuts the kingdom can ill afford. But, sooner or later, Iran will be on its way back into the oil market. Read more

The fate of proposals to reform the Mexican oil and gas industry, now being considered by the country’s lawmakers, matters well beyond Mexico itself. The outcome could reshape the energy sector in a number of important countries. Read more

Energy policy is a serious problem which won’t be solved by gimmicks or slogans. Most of the debate in the UK over the last few weeks has focused on the prices being paid by domestic consumers. Now, though, the focus is set to shift to the competitive burden on businesses and jobs not just in the UK but across Europe. With yet more price increases to come, the need for a new and serious policy covering both supply and demand is becoming urgent. Read more

Do renewables represent the future of the energy business or a minor contributor in a sector which will continue to be dominated by hydrocarbons? That will the underlying question at the FT Renewables conference this week. The answer looks to be the latter but financial engineering or a major technical breakthrough could yet change things. Read more

Any new graduate wanting to learn about how companies should handle tough public policy questions should study how the energy companies have responded to Ed Miliband’s proposal to freeze utility prices in his party conference speech three weeks ago. Their actions and comments have been a masterclass in how to make a difficult situation worse.

We have had a mixture of denial (“they’ll never get elected”, “he didn’t really mean it”, “the lawyers will stop him”), mindless abuse (“I don’t think people want to live under Stalinism”) and fear tactics which usually mention the prospect of the lights going out. No one in the industry has bothered to think about why Mr Miliband’s comments have proven so popularRead more

Carl Icahn’s purchase of a 5 per cent stake in the Canadian company Talisman Energy marks the entry of activist shareholders into the energy business. Could it indicate the beginning of a revolution?

Activist shareholders have a bad reputation, particularly in Europe where they are seen as asset strippers who pull apart good businesses for a short-term gain. That can happen but they can also be very productive in forcing companies to examine very hard what they are doing with their shareholders’ money. Read more

Just before the summer I was asked to advise a group of non-executive directors who serve on the board of a very large international energy business. They wanted to know what skills and attributes I thought they should be looking for in appointing a new chairman. Wisely they were putting the identification of qualities ahead of the search for names.

Every company faces different issues. But I think many of the following key points apply across the energy industry to companies large and small.

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For the first time in more than a century Turkey has the potential to play a crucial role in the world economy. Its geographic position offers the tantalising prospect of the country becoming one of the key transit routes for both oil and gas from four different regions – southern Russia, central Asia, the Middle East and now from the newly discovered gasfields of the eastern Mediterranean. The only question is whether politics and emotions will get in the way. Read more

The report of the public administration selection committee of the UK House of Commons into the workings of Whitehall earlier this week sounds like a dull read. It is not. This is a serious document which deserves to be read by anyone who cares about how power is exercised in modern government. It also carries an undertone of barbed malice, some deserved, some not which fans of CP Snow will much enjoy. Read more

Robert Mugabe has “won” another election in Zimbabwe. In plain English for “won” read “stolen”. The people of Zimbabwe are condemned it seems to suffer under dictatorial rule for even longer. The conventional wisdom is twofold. First, that there is nothing to be done, short of a full scale invasion – something no one has the stomach for. And secondly that things will get better when Mr Mugabe, now 89, finally passes on. I would challenge both statements.

The chances that Mr Mugabe’s death or incapacity will be followed by a transition to a normal pluralist democracy are slim. The current regime is not totally dependent on him. The ruling party and the cadre around them are well entrenched and clearly doing very well out of the country’s natural resource and mineral wealth, even if very little of the money stays in Zimbabwe. Mr Mugabe’s successor could easily be a military or security chief who is part of this ruling clique. Those in power may have too much to lose to give up easily. Read more

At the last meeting of the President’s Committee of the CBI, the British employers’ association, members were asked to name the two biggest problems their companies faced. The answers were the skill levels of their recruits and energy policy – the chronic indecision of Whitehall which leaves investment frozen, prices rising uncompetitively and Ofgem warning about blackouts.

A few weeks ago at an Anglo Indian business summit one British bank Chairman warned the Indians that while an Indian energy strategy was clearly needed, the worst example they could follow was the UK model. Meanwhile on the serious side of Whitehall, there is increasing talk of a pre summer reshuffle to strengthen the Energy Department and even mutterings about abolishing the separate Ministry entirely and merging its functions back into the the business department. Read more

When it comes to energy, the UK is a fortunate country. First coal, then oil and gas in the North Sea, and now shale gas. It is still too early to say whether shale gas represents anything close to the wealth creation opportunity which came from the North Sea. But it is becoming clearer that the resources base is huge. The report published this week covered just part of the North and Midlands and came up with a central estimate of 1,300 trillion cubic feet. We have to wait, for reasons which are not completely clear, to see the estimates for the rest of the UK. Read more

Month by month, the consequences of the shale gas revolution in the United States are working their way through the international energy market. There has been much discussion of whether the US will permit shale gas exports in any quantity. But even before that is decided the growth of shale gas production in the US is already having an impact. The reduced need for US gas imports leaves supplies from Trinidad, North Africa and elsewhere to find a new home. That means that gas prices in Europe and Asia will fall. And even more important, shale gas is displacing coal from the US power generation sector. Read more

Businesses which rely on continuing public subsidies or particular formulations of public policy always carry added risk. The reality is that public policy changes. For a brief period there is full-hearted support, often driven by a crisis or a sense of looming danger. But the attention span of electorates and policy makers is short. Something else happens, another crisis looms and a new priority takes precedence.

The news last week that Siemens is to close its solar business is just one of many indications that for the renewables sector times have changed. Read more

If Samuel Beckett had made Godot a woman he would have called her Angela. That is the joke in Berlin where every policy is on hold and everyone – from the members of the Eurozone to the prospective nominees for the new European Commission – is waiting for Angela. And she in turn is waiting for the results of the election on September 22nd. Then and only then will we know the shape and balance of the next coalition Government. The result is a period of deep uncertainty, not least over energy policy which is frozen by indecision. Read more

The news that Exxon is to build a $10 bn LNG export facility in Texas marks another significant step forward in the story of shale gas and its disruptive impact on the world energy market. Those who want a parallel for the painful process through which so many of the established forces of the industry on one side and the lobby groups on another have struggled to come to terms with the reality of shale gas over the last three years should read John Heilbron’s fascinating book on GalileoRead more

A report from the Grantham Institute and the Carbon Tracker initiative, titled “Unburnable Carbon”, has produced a studied silence from the energy industry. The study, published last week, is privately being dismissed as the predictable conclusions of people who don’t understand business. But investors should take it more seriously because it opens up some very interesting questions about what energy companies are doing with their money.

In summary, the report says the investment of more capital to find hydrocarbons is a waste of money. More than enough has been already identified to fulfill the world’s needs if we are to meet the carbon limits implied by international agreements on climate change. Under those agreements, carbon use will be reduced over the next four decades, leaving substantial supplies stranded. On this basis, some companies – and therefore the funds which hold them – are carrying dangerous levels of risk, based on the false assumption that the international agreement will never be implemented. The companies are overvalued because some of their assets will never be used.

I have two points of doubt about this thesis. Read more

Is it possible that while one Whitehall Department is constructing a “secret” crisis centre to deal with cyber attacks, another located less than a quarter of a mile away is preparing to sell part of the UK’s national infrastructure to the very people behind those attacks?

The establishment of a cyber security centre was reported by the FT last week. Anyone who doubts that its primary focus is the Chinese should read the report produced a couple of months ago by the specialist US consultancy Mandiant.

The company identified attacks originating in a building occupied by the General Staff Department of the People’s Liberation Army in Shanghai which had targeted 141 companies across 20 major industries. China has denied official involvement but has not yet agreed to stop the attacks.

Unfortunately no one seems to have mentioned these developments to Ed Davey, energy secretary, or EDF, the company which wants to develop new nuclear power stations in Britain. If the price and risk allocation for that deal is agreed, and Mr Davey has said that agreement is close, the next question is how the deal will be funded. EDF does not have the capacity to find the £14bn required and so has been looking to Chinese partners to provide much of the cash. Read more

Sizewell A (left) and Sizewell B (right), two generations of British nuclear power on the Suffolk coast

Sizewell A (left) and Sizewell B (right), two generations of British nuclear power generation on the Suffolk coast

Why is it proving so difficult to close the deal on new nuclear in Britain? In part, of course, there is the normal arm wrestling negotiation. This is focused on the so called “strike price” – an energy price below which the suppliers will get compensation from the state – and on the allocation of risk around a £14bn construction contract.

The UK government wants a strike price of around £65 to £70 per MWh which is high but probably politically defensible. They well remember that in 2008 EDF talked about a price of £45 per MWh. EDF now wants something between £95 and £100, but they can probably afford to accept the Government’s figure and still make a reasonable profit.

The allocation of the risks is even more important than the strike price. Unless the Government is careful it could end up pay enormous sums for capacity which is underused because cheaper supplies will be available to consumers. If the company gets it wrong, a bad deal would overhang its finances for decades. Read more