Monthly Archives: November 2018

Britain’s richest man Jim Ratcliffe is hoping to extend his grip on the North Sea by buying oil and gas fields from US giant ConocoPhillips.

Mr Ratcliffe’s company Ineos and ConocoPhillips have both confirmed that they are in exclusive talks.

Among the assets up for grabs is Conoco’s 6.5% stake in the Clair field, west of Shetland.

The field potentially has 7 billion barrels of oil in place, according to BP’s chief executive Bob Dudley.

BP recently bought a 16.5% stake in the Clair field from ConocoPhillips, giving the UK oil giant a total holding of 45.1%.

Reports suggest that the assets ConocoPhillips is selling could be worth as much as $3bn (£2.3bn).

They do not include the company’s oil terminal in Teesside or its commercial trading group based in London.

The North Sea is still a relatively new area for Mr Ratcliffe and Ineos.

The billionaire, whose £21bn fortune makes him the UK’s richest man according to the Sunday Times rich list, has traditionally invested in speciality chemicals businesses.

Ineos owns the Grangemouth oil refinery site in Scotland which manufactures a range of petrochemicals that are used in a wide range of products including bottles, food packaging and in the pharmaceuticals industry.

neos first acquired a number of North Sea gas fields in 2015 before it buying up the oil and gas business owned by Denmark’s Dong Energy for £1bn two years later.

The Sunday Times reported that Ineos had put down a deposit in exchange for three months of exclusive talks with ConocoPhillips.

Ineos declined to comment.

Consumer rights group raises fresh fears over pace of smart meter roll out, as government awaits latest damning NAO report

Which?: Energy companies need to install 30 smart meters a minute to meet 2020 target.

The organisation calculated that to meet the long-standing target suppliers will need to install an average of 30 smart meters per minute, every day, for the next two years, to fully replace 46 million existing meters.

The report comes just days ahead of the anticipated publication of a new report from the National Audit Office, which is expected to feature scathing criticism of the £11bn project, accusing it of being badly delayed and over budget. It is also set to highlight how the rollout has seen millions of first generation smart meters installed that will have to be upgraded in the coming years to provide the smart grid functionality and interoperability that is expected to be one of the main advantages of the technology.

The Which? report also argued that government estimates for the expected savings on an annual dual fuel bill in 2020 as a result of the rollout have already fallen from £26 to just £11.

“So far, large suppliers have installed more than 11 million smart meters, however this is just a quarter of the 46 million existing meters that could potentially be replaced,” the organisation said.

The latest update builds on an analysis from February this year, which calculated that large energy companies would need to install 24 smart meters a minute to meet the deadline. It adds that far from speeding up the rollout has slowed down in recent months.

“Energy suppliers maintain that they will meet the 2020 target, but as the deadline draws closer, Which? believes this is looking increasingly unlikely and more must be done to ensure that all consumers are offered the opportunity to benefit from upgrading to a smart meter,” the group said.

“The smart meter rollout has been plagued by problems and been massively delayed, the benefits have been overstated and the savings they could bring consumers are at risk,” added Alex Neill, Which? managing director of home products and services. “Therefore it’s time for the government to replan with industry and consumer groups to ensure people get the maximum benefit at the minimum cost.”

Smart meters and related smart grid technologies are wiodely regarded as crucial to efforts to improve energy efficiency and decarbonise UK power supplies by enabling more intelligent management of electricity supply and demand.

The government has consistently defended the handling of the roll out and a spokesman for the Department for Business, Energy, and Industrial Strategy today said the project had already seen millions of people seize the opportunity to “take control of their energy use to cut their bills”.

He added that the projected £11 a year reduction in annual fuel bills was “not insignificant” and would deliver £300m of savings across the economy in 2020 alone.

A spokesman for trade body Energy UK offered a similar take. “Energy suppliers are committed to meeting the government’s deadline of ensuring all eligible households and businesses are offered a smart meter by 2020,” he said. “The industry is working hard to reach as many customers as possible and to ensure the rollout is carried out safely, efficiently, cost-effectively and delivers a positive experience for customers. With more than 12 million smart meters now installed in Great Britain, more and more customers are enjoying the benefits that smart meters bring and are reporting high levels of satisfaction.”

Robert Cheesewright, director of corporate affairs at Smart Energy GB, the body tasked with managing the smart meter roll out, said: “Britain’s smart meter rollout is a vital upgrade for the nation’s energy infrastructure. Smart meters are crucial if we want to tackle climate change and reduce our carbon footprint. In line with the government’s figures, smart meters will help people save on average almost £50 a year on their energy bills by 2030. Energy suppliers are working hard to offer all households smart meters as soon as possible.””

Energy firms SSE and Npower are renegotiating the terms of a merger of their UK retail operations, blaming the introduction of an energy price cap.

The merger, which has been cleared by the regulator, is set to create the UK’s second-biggest energy company.

Both firms said they still thought the merger had benefits, but that any final deal was likely to be delayed.

An energy bill price cap of £1,137 a year for “typical usage” is due to come into force in the new year.

It means suppliers will have to cut the price of their default tariffs to the level of the cap or below it.

Energy bills to be capped in new year

Watchdog clears SSE-Npower merger

Households to benefit from energy price cap

The government introduced legislation earlier this year to establish the price cap following concerns about how efficiently the energy market was working.

In September, SSE said the cap would lead to “significantly lower” profits than it had expected at the start of the financial year in its retail arm.

The energy firm said it had become apparent that the impact of some “recent market developments”, including the price cap, meant that the “commercial terms associated with the proposed combination will need to be reconsidered”.

As a result, SSE and Npower’s German owner Innogy were in talks “regarding potential changes” to the commercial terms of the deal, it added.

SSE chief executive Alistair Phillips-Davies said: “We continue to believe that creating a new, independent energy supplier has the potential to deliver real benefits for customers and the market as a whole, and that remains our objective.”

Talks will take place over several weeks, with an update on progress in mid-December.

‘Adverse developments’

The two companies were aiming to complete the merger – which would cut the “Big Six” energy firms down to five – in the first quarter of 2019.

However, SSE said it was now not likely to be done by then.

Innogy said in a statement that “adverse developments in the UK retail market and regulatory interventions such as the price cap have had a significant impact on the outlook for the combined retail company”.

It said the negotiations would include talks about “potential additional direct or indirect financial contributions by each party”.

Earlier this week, energy regulator, Ofgem said the cap would save 11 million customers an average of £76 a year on their gas and electricity bills.

Households in England, Scotland and Wales on default tariffs – such as standard variable tariffs – stand to benefit. Consumers in Northern Ireland have a separate energy regulator and already have a price cap.

More than half of all households in Britain are on default tariffs because they have never switched or have not done so recently.