May 17, 2020

ConocoPhillips CEO James Mulva Ready to 'Split'

Conoco
Phillips
ConocoPhillips
James
Admin
2 min
After the split of ConocoPhillips into two separate companies—one refining, the other exploration and production—CEO James Mulva will retire
TO ENHANCE YOUR READING EXPERIENCE, CLICK HERE TO VIEW THIS ARTICLE IN OUR INTERACTIVE READER! When Conoco Inc. and Phillips Petroleum Company merged...

 

TO ENHANCE YOUR READING EXPERIENCE, CLICK HERE TO VIEW THIS ARTICLE IN OUR INTERACTIVE READER!

When Conoco Inc. and Phillips Petroleum Company merged in 2002 to form ConocoPhillips, then incoming CEO James Mulva probably never would have guessed that the company would be splitting into two again just a decade later.  This summer, ConocoPhillips reached the decision to split off its refining division from its exploration and production division, effectively forming two companies.  James Mulva has expressed that upon completion of the split in early 2012, he will be retiring from ConocoPhillips.

"Consistent with our strategy to create industry-leading shareholder value, we have concluded that two independent companies focused on their respective industries will be better positioned to pursue their individually focused business strategies," says Mulva. "Both companies will continue to benefit from the size and scale of their significant high-quality asset bases and free cash flow generation, allowing them to invest and create shareholder value in a changing environment."

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Mulva earned his Bachelor’s and Master’s degrees in business administration from University of Texas at Austin.  Following graduation, Mulva served as a U.S. Navy officer prior to beginning work for Phillips in 1973.  He worked his way up in the company, serving as chief financial officer, then vice president, until becoming president and chief operating officer in 1994.  Mulva was awarded an honorary Doctorate of Engineering from the Colorado School of Mines in 2010. 

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Mulva spearheaded mergers and acquisitions with ConocoPhillips as oil companies in the late 1990s and early 2000s operated under the motto, “bigger is better.”  However, while the merger of Conoco and Phillips established ConocoPhillips as one of the six oil supermajors, the company has lagged behind competitors like ExxonMobil.  Since the economic collapse in 2008, ConocoPhillips has undertaken no new acquisitions, and the company’s decision to split in two may seem like a step backwards to many.

However, the split may actually be the smartest move ConocoPhillips can make.  Unlike its competitors who maintain a diversified portfolio of offerings, the split into two pure plays—one focused on refining and marketing, the other on exploration and production—will rank the new companies as number one in their market segments.  In fact, following the announcement of the split, ConocoPhillips stock rose 7.5 percent almost immediately. 

James Mulva has his work cut out for him.  He plans to see the split through to its finalization in early 2012, then retire, ending a nearly four-decade career in the oil business.  ConocoPhillips’ only problem now is where to find two new world-class CEOs to head the newly separated companies. 

 

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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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