Wednesday, November 20, 2013

Oilbarrel Newsletter 20th November 2013

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Oilbarrel Weekly Roundup 13th - 20th November 2013

DECC Minister Defends “Green Levies” To Build Wind Farms

Written By Stewart Dalby

I was talking about Ed Davey, the Minster for Energy and Climate Change, in this column last week and that it was good to run across him at Renewable UK’s annual jamboree in Birmingham recently. By comparison with some of the jokers who have held this office, he seems a rational, balanced individual, at least in his public utterances.

In the past we have had the likes of Ed Miliband. For it was he, who was the minister at DECC in the last Labour government. He was an acolyte of Gordon Brown, which does not look on anyone’s CV these days. But more than this he was behind the Feed-in Tariff fiasco. He set the initial price too high, at 41p a kilowatt hour against a 7p KWh market price. The idea  was anyone who would put a couple of 2KW solar panels in their south facing roofs could get paid for the power produced even if they used it themselves; and maybe sell it back to the national grid.

What happened was just about every spivvy builder around started constructing 50MW solar and wind farms on Greenfield sites in the countryside, sold everything to the national grid (totally against the spirit of the Feed-In Tarrif scheme) and claimed the whopping great subsidy.

Chris Huhne, the first environment minister in the coalition government and Davey’s predecessor tried to put a stop to this by reducing the Feed-In tariffs. But in truth he did not achieve a great deal else during his turn in office. He is an arrogant man, too clever by half, as Tory grandees use to say about young whippersnappers. His cleverness eventually landed him in the slammer.

Davey a less noisy figure than either Huhne or Miliband, made a reasoned speech to the Renewable UK conference. He is clearly very keen on renewable energy (perhaps it was because of the audience he was talking too). But methinks he massaged his figures a bit to make his case. He said with a fifth of electricity generating capacity due to close this decade, we need £110 bn of new investment to keep the lights on. He doesn’t say how much of this will come from consumers in the form of green levies.

He says since 2010 £31bn worth of private sector investment in renewable electricity has been announced with the potential to support over 35,000 jobs across the UK. Again he does not say how much the consumers have paid. I venture to suggest it is probably three times the £31 bn. And what about the jobs. It was suggested not so long ago that the north east of England an old industrial base would be littered with factories making wind turbine blades. As it is most of the growth of wind farms has been fuelled by imports notably from Vestas which is Danish. Vestas used to have a factory on the Isle of Wight, but they closed it because of the difficulties in getting planning permission.

He says that the UK leads the world in offshore wind farms. In fact there is around just over 3 giga watts (GW) of capacity in the North Sea, a long way short of the 32 GW once talked about. There is around 7 GW of wind farm generating capacity onshore.

Despite all this Davey’s logic is clear. A developing industry needs support and subsidy. James Lovelock -- the “Green Guru” who’s angered his fellow “Greens” by changing his mind about nuclear power plants which he now favours – reckons it takes 40 years for any innovation to become acceptable and for the price to drop. Well maybe.

The point is as I keep banging on about this: You can’t have it both ways. If you want to de-carbonise the economy and achieve energy security you have to pay for it.

Because of the furore over rising energy prices the government has launched a review. The review is looking at what Davey calls the social green levies – Warm Homes Discount and the Energy Company Obligation. These have been threatened with cuts Davey says: “We need to make sure that such support is paid for in a way that is fair to consumers.

But he adds: “But let me reassure you as clearly and unequivocally as I can, the current review is not about changing investment incentives for renewables, such as the Renewables Obligation, Contracts for Difference or Feed in Tariffs. The level of support will remain, as planned and as published”.

We will see. There is the David Cameron’s ‘get out of jail free card’ which is  there is going to be a shale gas and oil revolution in the UK that will replicate that in the US. We will be self- sufficient in energy. We will have energy security. We will not have to worry about supporting expensive and uneconomic wind farms. Well, maybe. Not every believes in a shale revolution here. More on this next week.

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Latest News

News: November 20, 2013

DECC Minister Defends "Green Levies" To Build Wind Farms

I was talking about Ed Davey, the Minster for Energy and Climate Change, in this column last week and that it was good to run across him at Renewable UK’s annual jamboree in Birmingham recently. By comparison with some of the jokers who have held this office, he seems a rational, balanced individual, at least in his public utterances.

Full story...

News: November 20, 2013

Rialto Energy Nails Down A New PSC Which Paves The Way For The Development Of The Gazelle Field In Cote d'Ivoire

Rob Shepherd, apart from being the new CEO of AIM and ASX-listed Rialto Energy is a droll and witty man with a good line in self depreciation. At the Oilbarrel conference last October 7 he said he would not be offended if some of the knowledgeable investors in the packed conference room started to walk out, “especially if you have been following the company for the past 18 months”.Rob was persuaded to join Rialto as interim CEO after a stint as CFO of Dominion Petroleum which was, like Rialto, focused on Africa. Dominion, of course was sold to London listed Ophir Energy in October 2011, a decision driven by funding challenges for  the small cap trying to wildcat in deep water frontier areas

Full story...

Features: November 19, 2013

Abu Dhabi-owned CEPSA Bags Coastal Energy For US$2.2 Billion

Shares in Coastal Energy, which has assets in Thailand and Malaysia, surged 210 pence or 23 per cent in Tuesday morning trading after the TSX and AIM-quoted E&P announced it was being acquired by CEPSA, Spain’s fourth-largest industrial group, in an all cash deal worth C$2.3 billion (US$2.2 billion).  A year back Houston-based Coastal was an investor favourite for its stand-out drilling successes in the Gulf of Thailand, where it took ex-Premier Oil acreage and built a production base of more than 20,000 barrels per day generating quarterly revenues of more than US$190 million.

Full story...

News: November 19, 2013

Enegi Oil Signs Agreement With Providence Resources To Advance Development Of Marginal Celtic Sea Discoveries

The share price may be underwater but the mood at Manchester-based Enegi Oil is rather more buoyant as its ABT Oil & Gas JV is starting to gain real traction.  The first breakthrough for the JV, which plans to use a low cost, unmanned production buoy to push otherwise stranded or marginal assets over the economic threshold, came this summer when it signed up to help develop Antrim Energy's stalled Fyne development in the North Sea.  Calgary-based Antrim had already been strung by cost overruns on other North Sea projects and had pulled the plug on the marginal Fyne project: ABT Oil & Gas, however, reckons it can deliver a workable development plan for this 9.9 million barrel oilfield in the central North Sea.

Full story...

Features: November 18, 2013

Poweralternatives:Financing Delays Continue To Weigh On Biomass Developer Helius Energy

There's a lot of public noise about the burning of biomass, be it wood chips, pellets, straw waste or exotica like olive cake, to create electricity.  Proponents argue it offers base load power from a renewable source that displaces emissions-busting coal consumption and extends the life of ageing power stations to help keep the lights on while the UK moves, slowly, towards a low carbon future

Full story...

News: November 18, 2013

Egdon Resources Has A Busy Year In 2012/13 With Increased Production And High Hopes For Exploration Successs

Egdon Resources is an AIM-quoted junior focused primarily on the UK, where it holds 27 licences, 24 of which are onshore, with 15 operated by Egdon. The company is also involved in France where there are a further three licences with a fourth pending. The group is a full cycle E & P group with production, development and exploration acreage including a developing position in high potential UK non-conventional plays. Best Estimate Prospective and Contingent Resources are put at 400 million barrels of oil equivalent (mmboe).

Full story...

Market Overview: November 16, 2013

Oil Markets On Hold Because Of Rising Inventories And Stagnant Demand

Rising inventories, stagnant demand and nervousness about American fiscal tapering all had the market on hold this week. In early trading, Brent crude was priced around US$108 with WTI close to US$94 a barrel

Full story...

News: November 14, 2013

Shares In Wessex Exploration And Northern Petroleum Knocked By Final Duster Offshore French Guiana

Shares in two AIM-quoted explorers took a hammering on Wednesday after the fourth and final well in the current drilling campaign offshore French Guiana came back dry.  Wessex Exploration slumped more than 45 per cent to 0.48 pence per share in morning trading while Northern Petroleum lost 10 per cent, falling to 34 pence.  The companies only have a tiny exposure to the deepwater acreage off the coast of South America through their Northpet Investments joint venture, which has a 2.5 per cent stake in the giant Guyane Maritime permit, alongside industry heavyweights Shell (45 per cent), Tullow Oil (27.5 per cent) and Total (25 per cent). 

Full story...

News: November 14, 2013

Faroe Petroleum Hopes To Repeat Past Successes As It Returns To The Halten Terrace To Test Novus Prospect

Shares in Faroe Petroleum moved higher over the first two days of the weekbefore falling off a bit as the AIM-quoted E&P announced one discovery and one high impact spud.  The Aberdeen-headquartered company, which increasingly operates in Norwegian waters where exploration is supported by a 78 per cent tax rebate, has made a discovery on the Snilehorn well in the Norwegian Sea, which operator Statoil reckons could hold between 57 and 101 million barrels of recoverable oil equivalent.

Full story...

News: November 13, 2013

Energy Minister Ed Davey Says Power Companies Should Stop Treating Customers Like “Cash Cows”

The controversy over power (gas and electricity prices) continues to rumble on.  Ed Davey, the minister at the Department of Energy and Climate Change (DECC) stuck his oar into the debate this week when he said the six big power big utilities should not treat consumers like cash cows.

Full story...
Press releases

November 20, 2013 - Ceramic Fuel Cells CFCL AGM Managing Directors Address
November 20, 2013 - Ceramic Fuel Cells CFCL AGM Chairman's Address to Shareholders
November 20, 2013 - Ceres Power Holdings Award of DECC Award
November 20, 2013 - Kentz Corporation Limited Kentz awarded $190m contract with Qatar...
November 20, 2013 - Exillon Energy Update on Formal Sale Process 
November 20, 2013 - Falcon Oil & Gas Ltd Announces Appointment of BDO as Auditor
November 20, 2013 - Wessex Exploration Plc Expiry of Subscription Period
November 20, 2013 - Iofina Operational Update 
November 20, 2013 - Quadrise Fuels International Execution of Contracts with AkzoNobel 
November 20, 2013 - Wentworth Resources : Expiry of Subscription Period
November 20, 2013 - Bridge Energy ASA Amendments to Financial Calendar
November 19, 2013 - Spyker Energy New Field Discovered At Pharos 
November 19, 2013 - Wasabi Energy Result of AGM 
November 19, 2013 - Tangiers Petroleum Ltd Letter to Shareholders
November 19, 2013 - Afren Plc Ogo drilling and resources update
November 19, 2013 - Max Petroleum Appraisal well results at Uytas
November 19, 2013 - Caza Oil & Gas, Inc Result of initial test well on West...
November 19, 2013 - Rialto Energy Ltd Appointment of Chief Financial Officer
November 19, 2013 - Red Emperor Resources Results of Meeting
November 19, 2013 - Aminex Plc Interim Management Statement 
November 19, 2013 - Coastal Energy Co CEPSA to Acquire Coastal Energy Company
November 19, 2013 - Heritage Oil Interim Management Statement 
November 19, 2013 - Plexus Group Centrica Production Well Contract Win 
November 19, 2013 - Lekoil Appointment of Adviser
November 19, 2013 - Solo Oil Appraisal of Ntorya
November 18, 2013 - Kentz Corporation Limited Interim Management Statement
November 18, 2013 - Northcote Energy Oil Production Rises Seven Fold at...
November 18, 2013 - Fastnet Oil & Gas Kosmos Provides Update on Foum Assaka...
November 18, 2013 - Edge Resources Half Year Results
November 18, 2013 - Edge Resources Placing to raise C$3.5 million
November 15, 2013 - President Energy Exercise of Options 
November 15, 2013 - Bankers Petroleum Director/PDMR Shareholding 
November 15, 2013 - Pantheon Resources Final Results 
November 15, 2013 - JKX Oil & Gas Interim Management Statement
November 15, 2013 - Antrim Energy Inc. Interim Financial Report-Third Quarter 2013
November 15, 2013 - EnQuest Plc Interim Management Statement 
November 15, 2013 - The Parkmead Group Final Results
November 15, 2013 - Serica Energy plc Share purchase by Directors 
November 14, 2013 - Sterling Energy Plc Update for Ambilobe and Ampasindava Blocks 
November 14, 2013 - Fastnet Oil & Gas Foum Assaka Farm-Out Update 
November 14, 2013 - Roxi Petroleum Plc Operational Update
November 14, 2013 - Faroe Petroleum Faroe acquires remaining interest in...
November 14, 2013 - Caza Oil & Gas, Inc 3rd Quarter Results 
November 14, 2013 - Ophir Energy Interim Management Statement 
November 14, 2013 - Ophir Energy Sale of 20% Interest in Tanzania Blocks
November 14, 2013 - Serica Energy plc Holding(s) in Company 
November 14, 2013 - Salamander Energy Interim Management Statement 
November 14, 2013 - Andes Energia Operational Update
November 14, 2013 - Salamander Energy Contemplated Unsecured Bond Issue of up to...
November 14, 2013 - Andes Energia Mirador del Valle x-1 well 
November 14, 2013 - Petroceltic International Romanian Drilling Update 
November 14, 2013 - Roxi Petroleum Plc Operational Update 
November 14, 2013 - Faroe Petroleum Faroe acquires remaining interest in...
November 14, 2013 - Fastnet Oil & Gas Foum Assaka Farm-Out Update
November 13, 2013 - Ceramic Fuel Cells CFCL Operational Update 
November 13, 2013 - Northern Petroleum Plc French Guiana GM-ES-5 Well Completion
November 13, 2013 - Tangiers Petroleum Ltd Issue of Equity
November 13, 2013 - Heritage Oil Nigerian Strategic Alliance
November 13, 2013 - Tullow Oil plc Nigerian Strategic Alliance
November 13, 2013 - Chariot Oil and Gas Ltd Update on Moroccan Portfolio
November 13, 2013 - Providence Resources Providence Resources P.l.c. : ABT Oil &...
November 13, 2013 - Oilex Ltd Appendix 3B
November 13, 2013 - Lansdowne Oil & Gas ABT Agrees to Farm into Helvick Oil Discovery
November 13, 2013 - Enegi Oil Joint Development Agreement signed with...
November 13, 2013 - Bowleven Plc Result of Issue of Equity


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