BP wins over Greenpeace in North Sea oil court case
A Scottish court handed BP a win over Greenpeace on Thursday after the environmental group tried to void the energy company’s licence to exploit a North Sea oilfield, saying the climate impact of the end-use of oil should not affect permits. Greenpeace had said the emissions from the ultimate consumption of the oil – rather than just the smaller amount of emissions from the extraction process – should be the criterion for granting a licence. It also said there had been errors in the consultation process preceding the granting of the permit. UK regulators approved the 20,000 barrels per day Vorlich field, off the coast of Aberdeen, Scotland, in 2018 and it started producing in late 2020. Judge Colin Sutherland of Scotland’s Court of Session in a ruling on Thursday said Greenpeace had the opportunity to engage in the process before the permit was granted. “The question is whether the consumption of oil and gas by the end user, once the oil and gas have been extracted from the wells, transported, refined and sold to consumers, and then used by them are ‘direct or indirect significant effects of the relevant project’. The answer is that it is not,” the judge said in his decision, seen by Reuters. “It would not be practicable, in an assessment of the environmental effects of a project for the extraction of fossil fuels, for the decision maker to conduct a wide ranging examination into the effects, local or global, of the use of that fuel by the final consumer.” Typically permits are granted according to how emissions-efficient the extraction process itself is. Greenpeace said it would seek an appeal before the Supreme Court of the United Kingdom. “We will not give up the fight for the climate,” Greenpeace UK executive director John Sauven said in a statement. BP’s emissions from operating and powering assets such as oilfields, known as Scope 1 and 2, were 54 million tonnes of CO2 equivalent last year, while those of the end-use of its products, known as Scope 3, were 328 million tonnes. BP has pledged to become a net zero company, including its Scope 3 emissions, by 2050. It had no immediate comment on Thursday’s ruling, which follows a series of legal actions brought by climate campaigners that are increasingly turning to the courts to try cut fossil fuel use. They have scored wins in cases against energy major Royal Dutch Shell and governments such as Germany.
BPCL Privatisation: SEBI unlikely to exempt open offers for Petronet, IGL
India’s capital market regulator is unlikely to give exemption to the company acquiring BPCL from making mandatory open offers for Petronet LNG Ltd and Indraprastha Gas -share purchases which will be countered by other promoters of the two firms such as GAIL to save from going private, officials said. Bharat Petroleum Corporation Ltd (BPCL) holds 12.5 per cent of the shareholding in India’s largest liquefied natural gas importer, Petronet, and a 22.5 per cent stake in city gas retailer, IGL. It is a promoter of both the listed companies and holds board positions. As per the legal position evaluated by the Department of Investment and Public Asset Management (DIPAM) – the department running the process for the sale of the government’s entire 52.98 per cent stake in BPCL – the acquirer of BPCL will have to make open offers to the minority shareholders of Petronet and IGL for the acquisition of 26 per cent shares. To avoid such a scenario, an exemption request was made to the Securities and Exchange Board of India (SEBI). “We have been informally told that the exemption request is unlikely to be acceded as SEBI mandate is to protect minority shareholder interest,” a top government official, who did not wish to be named as the information is not public, said. If the open offers are successful, the acquirer of BPCL would also become the largest shareholder in Petronet (12.5 per cent of BPCL plus 26 per cent from the public) and get a controlling holding in IGL (22.5 per cent of BPCL and 26 per cent from public). “So in essence, the two companies will also get divested alongside BPCL,” the official said. To check this from happening, the other promoters of Petronet and IGL would also launch counter offers to buy an equivalent 26 per cent stake so as to ensure public sector firms retain a controlling stake. PTI had on July 21 first reported on the move by promoters of Petronet and IGL to save the companies. “We have a clear understanding that there is no bar on other promoters from launching share purchase offers and they will do it,” he said. State-owned gas utility GAIL is an equal promoter of IGL alongside BPCL. In Petronet, GAIL, refiner Indian Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC) are joint promoters alongside BPCL, holding 12.5 per cent stake each. The remaining shares in both Petronet and IGL are held by public and institutional investors. Originally, DIPAM had on April 19 made a request to SEBI for a grant of exemption for an open offer in Petronet and IGL. SEBI, however, conveyed that the application needs to be made in the prescribed format by BPCL as the promoter of IGL and Petronet, the official said adding BPCL subsequently made such an application. The other alternative to avoid the new owner being forced to make an open offer was for BPCL to sell a part of its shareholding in Petronet and IGL, thereby shedding its promoter status. However, BPCL is opposed to such an idea as it will be a value destroyer. The government’s 52.98 per cent stake in BPCL is valued at about Rs 51,800 crore at the current share price. The requirement for making an open offer for an additional 26 per cent to minority shareholders of the company will cost an additional Rs 25,400 crore at current prices. On top of it, an open offer for a 26 per cent stake in IGL would cost the acquirer an additional Rs 9,464 crore and a similar offer for Petronet would cost about Rs 9,000 crore. Mining-to-oil conglomerate Vedanta and private equity firms Apollo Global and I Squared Capital’s arm Think Gas are in the race to buy the government’s stake in BPCL. The stake sale in India’s second-largest fuel retailer is crucial to raise a record Rs 1.75 lakh crore from disinvestment proceeds in fiscal 2021-22 (April 2021 to March 2022). BPCL will give the buyer ownership of around 15.33 per cent of India’s oil refining capacity and 22 per cent of the fuel marketing share.
Brazil first post-pandemic oil auction finds very few buyers
Brazil’s oil auction ended in disappointment on Thursday, with the government selling offshore drilling rights in only five out of 92 blocks on offer. The dismal results reflected the weakened state of the oil industry during the Covid-19 pandemic as well as environmental concerns, according to experts. The auction brought in just 37.14 million reais ($6.7 million) compared to the $2 billion raised at the previous auction held in October 2019, before the pandemic started. Crucially, in a win for environmental activists, no offers were made for the blocks in the northeastern Potiguar Bay, which is close to the Fernando de Noronha and Rocas Atoll archipelagos, the former a UNESCO World Heritage site and the latter a biological reserve. Around 50 protesters demonstrated in front of a hotel in Rio de Janeiro where the auction took place, notably against the projects’ risks to traditional fishing. One demonstrator carried an iconic AFP photograph of an oil-stained Brazilian boy following an oil spill off the coast of northeast Brazil in 2019. All the five blocks were bought by Royal Dutch Shell. They are located in the southeastern Santos Bay, close to the oil-rich pre-salt layer on Brazil’s coast. Brazil’s state oil company Petrobras, usually very active at auctions, made no bids. Rodolfo Saboia, the director of the National Oil Agency, which organized the auction, insisted the result was “positive” given how hard the industry has been hit by the coronavirus pandemic. “We cannot call it a failure, we couldn’t expect all the blocks to find a buyer,” he said. But Fernanda Delgado, a researcher at the Getulio Vargas Foundation, told AFP that “everyone expected there to be interest in more areas.” The lack of bids was because companies “did not want to take the political risk or environmental risk,” Delgado added.