Attacks on Crude Oil in Nigeria
Following the kidnappings of contract workers from Exxon Mobil Corp. a few weeks prior, gunmen raid a ship supplying a Chevron Corp. offshore oilfield Thursday night in Lagos, Nigeria. As attacks on crude oil tankers continue to rise, concerns over a controversial amnesty deal threaten Africa's largest oil producing country.
Eight men boarding the MV C-Endeavor attacked the crew, abducting three workers who remain anonymous due to security rules. The contractor supplying the ship, Edison Chouest Offshore of Louisiana, has yet to comment on the incident.
Chevron spokesman Kurt Glaubitz told The Associate Press, “The safety of our employees and contractors is our first priority. Chevron Nigerian Ltd. is assisting the service company to ensure the safe release of the kidnapped crew members."
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When attacks on foreign oil companies saw its first wave in 2006, a government-sponsored amnesty program in 2009 paid ex-fighters to curb violence. But while many firms continue to pump billions of oil from the country's Niger Delta, most of the country remains incredibly poor and few have seen any benefits.
Adding to debate, President Goodluck Jonathan has recently proposed an end to fuel subsidies that would redirect $7.5 billion towards infrastructure and social program next year. However, many are threatening mass protest if the nation's “only oil benefit” sees an end, seeing as the subsidies have kept oil prices within the country incredibly low.
Economists believe the removal of subsidies is necessary in rebuilding society, but it will come at a price most can not afford. The government will have to be extremely clear about where the extra money is going to curb the mounting uproar of angry protesters and pirates to come.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.