May 17, 2020

BP may see Competition in Post-Conflict Libya

Libya
bp
deal
agreement
Admin
2 min
ExxonMobil, Chesapeake, Anadarko and Chevron may be bring competition to BP in a post-conflict Libya
British Petroleum (BP) is one of the very few foreign oil and gas companies with exploration and production licenses in Libya. BP signed a $900 million...

British Petroleum (BP) is one of the very few foreign oil and gas companies with exploration and production licenses in Libya.  BP signed a $900 million agreement with Libya’s National Oil Company in 2009, granting the company access to 21,000 square miles of land both onshore and offshore of Libya’s coast.  However, with analysts expecting a post-conflict Libya to be more pro-business and pro-west, BP may soon see a flood of competitors enter the country, such as ExxonMobil, Chesapeake, Anadarko and Chevron to name a few possibilities.

As the 9th largest oil producer in the world, Libya has in the past exploited its own resources.  Producing roughly 1.8 million barrels of oil a day and exporting about 85 percent of that to the world market, Libya holds the largest proven oil reserves in Africa—47 billion barrels.

BP’s history in Libya dates back decades.  Prior to 1971, the company had a vast presence throughout the country.  However, BP’s assets were nationalized by the Libyan government in 1971, and BP’s operations in the country came to a screeching halt.

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In 2007, BP reentered Libya through an agreement with Libya’s National Oil Company.  Part of the transaction involved BP lobbying the British government to release Libyan prisoners back to their home country.  Helping to expedite the prisoner release ultimately landed BP the deal.   

However, despite having access to Libyan reserves, BP hasn’t produced a single barrel of oil from the country.  BP’s 2010 drilling plans were put on hold amidst the company’s troubles in the Gulf of Mexico, where the Deepwater Horizon blowout and subsequent oil spill put BP in the international limelight.  In June 2011, when the company had planned to begin offshore drilling, the conflict broke out in Libya.  The company currently employs about 100 Libyan locals, but no foreign workers are operating in the country while the conflict continues.

At this point, BP officials claim to be “years away from production.”  No one can be certain as to what the political landscape will look like in Libya post-conflict.  However, it’s likely that we will see an inflow of foreign oil and gas companies offering competition to BP.

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

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:   

  1. 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. 
  2. 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. 
  3. 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.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"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 VenturesWave 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.

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