May 17, 2020

ExxonMobil to Drill Oil Off Vietnam... China in Dispute

China
claim
continental
dispute
Admin
2 min
China offshore oil claims extend beyond continental shelf in South China Sea
Written By:John Shimkus ExxonMobil has confirmed that it will begin offshore exploratory drilling off the coast of central Vietnam late in April. Howe...

Written By: John Shimkus

 

ExxonMobil has confirmed that it will begin offshore exploratory drilling off the coast of central Vietnam late in April. However, China has disputed drilling in the area in the past.

Apparently, China has laid claim to all of the South China Sea, including the Paracel archipelago east of Da Nang, Vietnam. The area where ExxonMobil plans to drill is located at Block 119, off Da Nang city adjacent to the Quang Ngai province.

"It's hard to see how China will react" to the drilling, said Ian Storey, a regional security analyst at the Institute of Southeast Asian Studies, Singapore. "I think it could be an interesting test case of where the dispute is heading."

PetroVietnam has partnered with Russia and several other countries to exploit the plentiful offshore oil fields, and other neighboring nations, such as Malaysia, Brunei, Taiwan and the Philippines all hold claims in the regions. Reports have come from various oil vessels that Chinese patrol boats often harass and intimidate explorers in the area.

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U.S. Defense Secretary Robert Gates has publicly objected to any Chinese efforts to “intimidate” U.S. Energy firms in the region.

Considering the current volatility of the international oil market, it will likely become more and more commonplace to see various nations hoarding oil reserves, even in regions of questionable proprietary right. It seems absurd for China to think it can hold claim on the entire South China Sea. The fact is, all the aforementioned neighboring countries have a right to reserves in the region. Even if one were to use the international continental shelf standard—in which a given nation has the right to reserves contained within its continental shelf—China would still only be entitled to a part of the region, not the entire Sea! However, China apparently is making claims that it has a yet unconfirmed extended continental shelf in the South China Sea, despite geographical data suggesting otherwise. It will be interesting to see just how this conflict plays out, especially with the international community’s desperate grab for oil reserves amidst tensions in the Middle East.

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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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