MoneyiWon.com/Dow Jones: U.K. energy watchdog Ofgem is to investigate the likes of Royal Dutch/Shell Group (RD,SC), ExxonMobil Corp. (XOM), BP PLC (BP) and Centrica (CNA.LN) as part of an ongoing inquiry into unusual U.K. gas price movements. (ShellNews.net)
Posted 6 Oct 04
LONDON -(Dow Jones)- U.K. energy watchdog Ofgem is to investigate the likes of Royal Dutch/Shell Group (RD,SC), ExxonMobil Corp. (XOM), BP PLC (BP) and Centrica (CNA.LN) as part of an ongoing inquiry into unusual U.K. gas price movements.
Ofgem Tuesday said the inquiry so far had highlighted North Sea gas contracts involving seven companies in all as requiring further investigation.
Ofgem Chief Executive Alistair Buchanan said much of last year's sharp gas price rise could be explained by surging oil prices and declining North Sea gas reserves. But there remained questions surrounding about 5% of available gas supplies that didn't reach the U.K. market for some reason.
"There's a small knot of contracts that are stopping gas flowing and we'll continue to discuss and examine those contracts," he said.
The seven companies named in the inquiry are Shell, ExxonMobil, Centrica, BP, Total (TOT), Amerada Hess Corp. (AHC), and Perenco.
Both BP and Shell declined to comment until they had looked more closely at Ofgem's latest announcement.
An annoucement from industry group the U.K. Offshore Operators Association is expected later Tuesday.
The inquiry will cover three gas fields in the North Sea: Sean, Indefatigable, and Leman.
A spokesman for BP said the company was surprised to be mentioned by Ofgem as BP had no ownership in Leman and Indefatigable fields in October 2003.
BP announced it was selling the fields to Perenco in February that year and completed the transaction the following September, he said.
BP is, however, a minority owner in Sean, a field which has a long-term offtake agreement with Centrica, he added.
-By Adam Smallman, Dow Jones Newswires; +44 20 7843 9343; adam.smallman@dowjones.com