Oil companies face a “resoundingly negative” threat from a sharp growth of electric cars, one of the leading credit rating agencies has warned. “Widespread adoption of battery-powered vehicles is a serious threat to the oil industry,” says a report from Fitch Ratings that urges energy companies to plan for “radical change” spurred by new technologies that could arrive faster than expected. “If they stick their heads in the sand and try and pretend it will all go away, we think they will ultimately have issues,” the report’s lead author, Alex Griffiths, a Fitch managing director, told the Financial Times. “They need to have a plan.” Although the report accepts it could take a long time for electric cars to become a disruptive force through mass adoption, Fitc h outlines a grim scenario for global oil companies, such as Chevron, ExxonMobil and Royal Dutch Shell. The agency says that the threat of electric cars could create an “investor death spiral” as nervous asset holders sell out of oil companies, making debt and equity more expensive.
FT 19th Oct 2016 read more »
ONE of Scotland’s most influential firms has launched a new attack on Labour over its policy to ban fracking. Ineos, which wants to establish a shale gas industry in Scotland and wider UK, told Jeremy Corbyn in an open letter that his newly-adopted policy would mean a reliance on “unstable and illiberal regimes” for energy imports. The UK party recently adopted Scottish Labour’s plan to back an outright fracking ban. It is understood that Ineos, owner of the Grangemouth petrochemical plant and oil refinery which accounts for four per cent of Scottish GDP, has also written to Labour MSPs Jackie Baillie and Claudia Beamish calling for a rethink. Gary Haywood, the chief executive of Ineos Shale, told Mr Corbyn that the firm was “deeply disappointed” with the recent announcement, made at the party’s annual conference.
Herald 19th Oct 2016 read more »