News
Plans approved for IOW depot
Despite objections, Certas Energy’s plans for a new £1.5 million fuel depot on the Isle of Wight have been given the go ahead, with Certas promising to be on the Island “for the long-haul”.
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News
Logistics UK conference returns
Logistics UK’s ever-popular Transport Manager conference series – sponsored by Bridgestone Tyres –will return in autumn 2021 with live events planned at 11 venues around the UK. The conferences will highlight key issues for fleet managers, providing professional advice, and helping them remain compliant and up to speed on the latest legislative developments.
This year’s conferences will give delegates the chance to hear from a range of senior industry figures and policy makers, and the business group’s experts will be on hand throughout the day to advise on legislation and compliance issues. Topics to be covered by the event’s knowledgeable speakers will include logistics in urban centres, low emission vehicles, working safely with alternative fuels, a compliance update and much more.
James Firth, Logistics UK’s head of road freight regulation policy, comments: “We are delighted to once again be running this conference series in person. These popular conferences enable busy transport managers to stay up to date with ever-changing legislation and good practice advice. Compliance is vital in the logistics industry; it has been a challenging 12 months for operators and the Transport Manager conferences provide operators with peace of mind that they are equipped with all the information they need, as well as giving them the opportunity to hear from senior figures in the industry and have their questions answered.”
Greg Ward, Bridgestone’s commercial business unit director, said: “Bridgestone Tyres is thrilled to be sponsoring Logistics UK’s Transport Manager series, with each event allowing us to share our ground-breaking commercial products and services with the perfect audience. The conferences provide an invaluable insight into many of the burning issues facing the industry and the broad range of topics they will touch upon shares so much in common with our business as a whole. We are looking forward to meeting with delegates face to face once again and discussing how we can help their business needs.”
The price for Logistics UK members is £299 plus VAT for the first delegate and £269 plus VAT for subsequent delegates; for non-Logistics UK members the cost is £399 plus VAT for the first delegate and £369 plus VAT for subsequent delegates. This price includes access to all the exclusive conference sessions, a full package of refreshments throughout the day and a take-home bag packed with useful information.
Transport manager will be touring the UK from September to December 2021:
21 September – Hilton at the Ageas Bowl, Southampton
29 September – Grand Hotel, Gosforth Park, Newcastle
5 October – AJ Bell Stadium, Manchester
12 October – Culloden Estate & Spa, Belfast
19 October – East of England Showground, Peterborough
21 October – London Heathrow Marriott, London
2 November – Haynes Motor Museum, Yeovil
17 November – Doncaster Racecourse, Doncaster
23 November – Macdonald Inchrya, Scotland
25 November – St Pierre Marriott, Wales
2 December – Ricoh Arena, Coventry
For further information, or to book a place, please visit: www.logistics.org.uk/transport-manager
News
Countdown to ITT Hub 2021
Preparations are now in the final stages for the free Innovation and Technology in Transport event, ITT Hub, which takes place from 30th June to 1st July with the news that the event – the largest show of its kind in 40 years – can go ahead as planned under the latest Covid-19 restrictions announced by the Prime Minister on 14 June 2021.
Kevin Green, marketing & communications director at Logistics UK explains: “Covid-19 safety is of the utmost importance and consideration for social distancing and sanitation measures have been prioritised in every aspect of the event’s planning; Farnborough International Exhibition and Conference Centre’s team has been rigorous in taking every possible step to protect visitors to the show.”
More than 150 of the UK’s most innovative manufacturers, including Volta Trucks, Fiat, Ford and DAF Trucks, as well as key government departments and agencies, will be showcasing their cutting-edge services, products, strategies and ideas over the two-day event. More than 30 speakers will be presenting at Logistics UK’s Future Logistics Conference, including Major Tim Peake CMG.
There will be a requirement for face masks to be worn indoors, track and trace will be in place via the registration process and temperature checks will operate at entrances. In order to ensure the safety of all attendees and smooth operation at the venue, visitors and exhibitors must register in advance of the event, print off their badges and present them at the entrance for scanning.
To book your free place to the exhibition and conference, please visit www.itthub.co.uk/
News
FODs achieving profitability gains with Kingspan
Fuel oil distributors (FODs) can make significant efficiency and profitability gains by fitting the latest generation telemetry monitoring devices to customers’ tanks, according to Kingspan Energy Management Systems ahead of UKIFDA 2021 (virtual event, 7-8 July 2021).
Telemetry devices fitted to customers tanks enables level data to be seamlessly imported via API feed to an FOD’s software systems – typically CODAS & Fuelsoft (no need for file sending) – enabling auto-ticket generation.
FODs can also view, monitor and export tank data across their entire population through the Connect Sensor platform, which now comes with the addition of a mapping function.
“Increasingly, our fuel distribution customers not only use the data to auto-generate orders, they are also using it to reduce delivery frequency and optimise routing,” says Nick Hawkins, Kingspan’s commercial director UK & Ireland.
“It means they’re able to significantly cut travel time and left-on-boards thanks to more accurate planning.”
He continues: “We’ve been at the forefront of developments in tank and telemetry systems, working closely with our FOD partners, for many years.
“One of our key strengths is that we now have a suite of telemetry devices. That means, whatever the application, we have the most accurate and cost-effective solution, whether it be a plastic tank, steel tank, domestic, commercial, diesel dispenser, or a mobile bowser.
“Our devices are compatible with a range of connectivities such as 2G, 3G, NB-IoT, LoRa & SIGFOX. And our new Watchman Radar unit reads the tank level without the need to drill a hole, making it an ideal solution for plastic tanks owned by domestic customers.”
Click here for more information.
Kingspan Energy Management Solutions will be showcasing its “smart” tank monitoring systems at UKIFDA 2020 (virtual event), on 7-8 July 2021.
News
Essar Oil UK announces senior appointment
Essar Oil (UK) Limited (EOUK) is pleased to announce the appointment of Tim Bullock as independent non-executive director.
News
Certas’ Isle of Wight depot recommended for approval
Certas Energy’s new fuel depot on the Isle of Wight has been recommended for approval by the planning authority.
News
New HVO tanker for James D Bilsland
Croftamie based James D Bilsland recently shared images of its brand new tanker, running on HVO.
Jodie Allan, manager, James D Bilsland commented: “We have just purchased a new truck from RTN and have made the decision to run this vehicle on HVO, enabling us to reduce our carbon emissions by up to 90% with this vehicle and start decarbonising the rest of our fleet. We are pleased to be able to offer this fuel to customers looking to decarbonise, as it is a great product that produces positive results without any modification to vehicles.”
The company is currently partaking in the first trials of using HVO renewable fuels as an alternative to home heating oil in Scotland, as part of the future fuels trial.
Jodie continued: “We are so far pleased with how HVO is performing as an alternative to Kerosene in the domestic market within a property that we have converted.”
News
Slicker Recycling shortlisted for award
A specialist Midlands oil and waste recycling firm has been shortlisted for a prestigious industry award.
Slicker Recycling, which specialises in the collection and recycling of waste oils and commercial garage waste from across the UK, has been named as a finalist in this year’s National Awards for Excellence in recycling and waste management.
The Stourport-On-Severn company, which handles over 75 million litres of used lubricating oil every year, is shortlisted in the ‘Circular Economy Success’ category for the successful launch of its £70 million base oil re-refinery in Denmark which it opened in July 2020 in a joint venture with its German partners, Avista AG.
The state-of-the-art facility, which sees used lubricating oils transported from the UK, regenerates over 100,000 tonnes of used engine and machine oil annually – giving a variety of environmental benefits, including reduced CO2 emissions.
News
UKIFDA shares award shortlist
UKIFDA is pleased to announce the shortlist for the inaugural UKIFDA Innovation Award, sponsored by Fuel Oil News. The successful nominations are from:
Eliminox
Crown Oil
Mitchell & Webber
Join the Awards Ceremony at UKIFDA EXPO 2021 & Future Fuels, taking place on 7th July, to find out who is the winner.
News
Multiple appointments for rapidly expanding Attis Credit Solutions
Attis Credit Solutions is a new name to the sector but is made up of a team of specialist credit insurance brokers whose experience spans over 70 years. Recently founded by Paul Martin and Steve Hamstead, you can read more about Attis in our July issue of Fuel Oil News.
News
OTS Group delivers solutions for changing fuels
With UK developments in sustainable fuel increasing both the range available, as well as the ways in which they can be used, OTS Group identified the need to ensure that there are appropriate fuel delivery, storage and maintenance systems available for these sustainable fuels. Working with organisations like the Fuel Experts Association (FEA), which represents companies who are developing clean energy and clean liquid biofuels such as HVO, the group has developed its sustainable fuels storage offering.
OTS Group, the UK distributor for the ‘Green’ storage tanks, is leading the way to aid end users with temporary (and permanent) storage solutions for sustainable fuels, which are available for purchase, hire or loan, while they evaluate their desired route for sustainability.
The flagship products are the double-walled polyethylene tanks intended for storage and distribution of HVO (or other biodiesel fuels). These tanks are made of high-quality polyethylene, the main feature of which is resistance to various weather conditions and come with built in dispensing equipment stowed in a secure cabinet.
The AdBlue® tanks are made of special materials compliant with DIN 70 070, a European Chemical Industry standard, due to the corrosive properties of the substance.
“Throughout this constant evolution, innovation has remained the underlying principle to everything we do,” comments OTS Group chairman, Bruce Woodal, and managing director Steve Gain believes that there is a bright future for clean drop-in fuels: “One of the main opportunities for these fuels is that they can be manufactured to directly replace conventional fossil fuels (so called “drop-in” fuels) which means that the uptake is likely to be quick and widespread as it can be used by the existing fleet.”
There are currently in excess of 34 million passenger vehicles on the road in the UK using conventional engines, and more will be added between now and 2035.
News
CTS Piusi range compatible with new fuels
As the official UK agent of Piusi and a leading supplier of fuel equipment to OEM tank manufacturers, Centre Tank Services Ltd (CTS) is happy to announce that all Piusi products for diesel are 100% compatible with HVO, GTL and other paraffinic fuels made according to EN 15940:2019. After months of in-house testing, CTS is also pleased to confirm that its own product range including tank alarms and levels probes is suitable for use with HVO and GTL fuels.
This is a great step forward as, with no costly infrastructure changes in terms of storage, handling and vehicles, HVO and GTL are simply “drop-in” replacements for diesel. Given the UK Government’s ambitious emission targets, the future of the fuel industry relies on the uptake of these green liquid fuels over the coming years. Centre Tank Services Ltd hopes to see the adoption of a similar model to the Swedish one, whereby making HVO completely tax-exempt saw a 124% increase in usage.
You can find the full statement from Centre Tank Services at www.centretank.com.
News
Nicholl Fuel Oils achieves a fuel first
Nicholl Fuel Oils has installed Northern Ireland’s first hydrotreated vegetable oil (HVO) fuelling facility at its Carryduff 24-hour forecourt with plans to make this new, renewable biofuel available across all of the Nicholl Auto 365 forecourts as well as available for bulk purchase in 2021/2022.
News
LCM announces integration of IIS Tech
LCM Environmental, a leading fuel and tank infrastructure servicing company working with commercial and public sector clients of all sizes, has announced the integration of the team from IIS Tech, an environmental compliance and interceptor organisation.
News
Is biomethane the answer to decarbonisation?
Could biomethane hold the key to reduction of HGV emissions?
The Transport Policy Briefing, hosted by ADBA (Anaerobic Digestion and Bioresources Association) has revealed its agenda, including a discussion on the potential of biomethane to decarbonise fleets and cities.
The briefing, taking place on the 9th June 2021, will host panel discussions on the potential of biomethane, why it could be used to fuel vehicles and how switching to biomethane could save money as well as the planet.
Guest speakers include Philip Fjeld, CEO of CNG Fuels, Gary Mason, engineering director of Nottingham City Transport, David Hurren, CEO of Air Liquide and more.
If you would like to find out more about the potential of biomethane to decarbonise fleet operations, click here.
News
OnlineFuels acquired by DTN
OnlineFuels, the leader in digital transformation solutions for the refined fuels market has been acquired by DTN, a leading data, analytics and technology company. With the addition of the OnlineFuels innovative online trading platform, DTN is now the leading provider of solutions that bring visibility where it hasn’t existed before. In the near future, refined fuels customers will be able to access their operational data in one seamless platform along with the ability to support end-to-end buying and selling transactions.
James Stairmand, founder of OnlineFuels commented: “Proud to announce that after nearly 6 years of founding OnlineFuels, we have been acquired by DTN. A massive team effort to get this over the line. I’m excited for the next chapter and looking forward to joining the DTN team.
“I started the business with a view of one day exiting, so I’m delighted with the outcome. Happy I took the risk and went on my own adventure!”
The industry-leading solution solves a complex issue many commodity traders around the world face –how to complete transactions using real-time data to drive better profitability while also mitigating risk. Many transactions today are logged in separate programs or documents, leading to increased risks of human error. The end-to-end online marketplace –once added to the DTN suite of solutions –will alleviate that risk and allow customers to make confident decisions that impact their bottom line.
“Our customers look to DTN to not only make sense of their data and deliver operational intelligence, but also to do so through innovative solutions that support complex decisions and give their business a competitive advantage,” said Marc Chesover, president of DTN. “Adding the OnlineFuels team and online trading platform to DTN solutions strengthens our ability to serve our customers around the world and solve a long-standing challenge of digitising their buying and selling transactions.”
Once integrated, DTN will be able to seamlessly connect the buyers and sellers of commodities worldwide through a robust online marketplace. In the future, the company plans to leverage the OnlineFuels technology and offer it to additional markets and industries.
“By joining the DTN team, we see a great opportunity to continue investing in our ability to support digital transformation within the refined fuels industry in Europe and, later, North America,” said James Stairmand. “Through the integration, we will match our solution with existing and future DTN platforms to give our customers the tools needed to confidently make decisions, mitigate risks and turn their operations into a competitive advantage.”
The combined offering, once available, will provide a cohesive view of operations and the technology necessary to facilitate end-to-end transactions. This acquisition furthers the DTN mission of empowering customers with intelligent and actionable insights that result in confident decisions and a competitive advantage.
News
JET campaign targets new territories
JET, one of the UK’s leading fuel brands, is resurrecting its critically-acclaimed TV campaign – Keep on Moving.
Originally launched in September 2020 and shown exclusively in the North East and Midlands, the second airing, that coincides with the nation opening up again, will target new territories including: Yorkshire, East of England and the North West. The ad will also feature nationally on SkySports cricket: England vs New Zealand Test Matches.
Featuring a man ‘driving’ through the countryside on a grand piano while singing Joe Jackson’s iconic 80’s hit ‘Steppin’ Out’ – the memorable TV spot was praised for its ‘refreshingly absurd twist on the car commercial’ and for making ‘a visit to a gas station look epic’.
Commenting on the decision to re-run the campaign Áine Corkery, manager, brand, Phillips 66 Limited says: “The campaign landed so strongly with both our JET dealers and consumers first time around that making the decision to bring it back this year was an easy one. It’s an ad that celebrates the joy of driving and the open road and it captures our ‘driver-first’ ethos perfectly.”
The ‘Keep on Moving’ campaign will launch on Thursday 27th May on SKY and Virgin Media and will run until 4th July.
News
Stanlow secures government backing
A new project that forms part of Essar’s plans to decarbonise the Stanlow Refinery in North West England has secured a £7.2m grant from the Industrial Energy Transformation Fund.
The funding has been made available through the Department for Business, Energy & Industrial Strategy (BEIS) and will be invested in a project to install a new furnace in the crude distillation unit at Stanlow that will be able to run on a 100% hydrogen fuel source. It will be the UK’s first refinery-based furnace able to be fuelled entirely by hydrogen.
Once completed and operational, the net zero ready furnace will reduce Stanlow’s CO2 emissions by 11% per year and deliver immediate energy efficiency improvements. The furnace will use hydrogen produced by the HyNet North West project at Stanlow, with the first stage of the initiative set to come on stream in 2025.
The new furnace is another element in Essar’s transition to becoming a ‘Low Carbon Energy Provider’ of the future. This will also include the construction of two blue hydrogen production hubs at Stanlow under the HyNet project, which will attract £750 million in total investment and support a hydrogen economy across North West England and North Wales. HyNet’s hydrogen and carbon capture and storage (CCS) chain represents a major step forward for low carbon energy technology and innovation in the UK.
Together with HyNet, Essar has also announced plans to create a new facility to convert non[1]recyclable household waste into sustainable aviation fuel (SAF) for use by airlines operating at UK airports. The £600m project involves Essar Oil UK, Fulcrum BioEnergy and Essar’s subsidiary company Stanlow Terminals Limited and will convert several hundred thousand tonnes of pre-processed waste, otherwise destined for incineration or landfill, into approximately 100 million litres of low carbon SAF annually.
Essar chief operating officer Jon Barden commented: “This year has been about beginning to execute the strategy we’ve put in place to decarbonise Stanlow and position the site as a provider of sustainable fuels for the future. The investment into CD4, alongside the HyNet and Fulcrum projects, demonstrates our commitment to developing low carbon operations, with the ambition of becoming a net zero site by 2040.
“The funding from BEIS is an endorsement of the steps we’re taking, as well as a signal of the Government’s intent to transform the North West into a clean energy hub supporting jobs and economic growth for years to come.”
News
Clear focus on future fuels for industry Expo
The key speakers and industry topics have been revealed by UKIFDA for the two-day Future Fuels conference during UKIFDA EXPO 2021 on 7-8 July which will include a ministerial address by Lord Callanan, minister for climate change & corporate responsibility.
“We are very pleased with the plans for this year’s EXPO and what will be our first ever virtual event and Future Fuels conference – and delighted to reveal the line-up of speakers and talks for the two days,” says Ken Cronin, UKIFDA chief executive.
“At its core, this year’s exhibition is focused on Future Fuels – the incredible investment our industry is making in renewable liquid fuels and the central issues associated with it, including the role of next generation renewable fuels in helping both the UK and Irish Governments achieve net zero targets and the transition to renewable liquid fuels.”
Across the two days of the conference there will be a number of breaks to allow delegates to visit exhibitors’ booths and also for exhibitors to make announcements or invite people to specific presentations.
The programmes for the two days are sponsored by Aon and Cobo Tankers and Services Ltd, who will each sponsor a day together with EXPO headline sponsor Phillips 66 Ltd.
Ken Cronin will launch UKIFDA EXPO 2021 with an overview of how the two days will run, to make it as easy as possible for exhibitors, visitors, members, and delegates, to make the most of what’s on offer virtually this year.
UKIFDA membership and events manager, Dawn Shakespeare, comments: “We will kick off day one with sponsors Aon who are providing our keynote speech to get everyone geared up for a great two days of knowledge sharing, networking, and business deals.
“James Spencer, managing director of Portland, will then present an analysis of market trends that includes key trends of the past 2 years and highlights for the future, followed by an EU-focussed roundtable discussion on key events in the EU that will impact our industry over the next decade. Participating in these discussions are Kevin McPartlin of Fuels for Ireland, Nick Hayes of UKIFDA, and Thierry Javit of the European Confederation of Fuel Distributors.
“There will also be a policy roundtable with the Department for Transport, BEIS and the treasury on the key themes of the current policy landscape covering heat, transport and taxation.
“In the afternoon of day one a discussion on fuel poverty will take place, focusing on the goals for fuel poverty and how our industry help. This will feature representatives from the UK Government’s Committee on Fuel Poverty, National Energy Action, The Home Group, and the National Housing Federation.
“Towards the end of the day, representatives of the trade associations and countries will be setting the scene for future fuels, what needs to be done and the new norm. Taking part will be Ken Cronin of UKIFDA, Paul Rose of OFTEC and David Blevings of NIOILS.
“The day will end with awards being handed out by UKIFDA president Janet Kettlewell, for depot of the year, driver of the year, green award, and an award for innovation.”
The format for UKIFDA EXPO 2021 is similar to the programme for previous EXPOs that have taken place during the past 40 years – only this time everything has been designed with the virtual experience in mind.
“Day two will be opened with an address by Lord Callanan, who has ministerial oversight of our sector, followed by Simon Holt of headline sponsors Phillips 66 Ltd and a presentation from Fernando Gomis and Joby Clark of day two sponsors Cobo Tankers and Services Ltd,” adds Dawn Shakespeare.
“A discussion on the key trends in the production of biofuels and next generation renewable fuels will be a highlight of the second day, with analytical contributions from representatives of Argus Media, Climate Change Committee and key suppliers Neste, Greenergy, Prax/Harvest, Phillips 66 Ltd and Argent Energy.
“Day two will also feature an important and insightful roundtable Q&A on the how the industry trials of HVO renewable liquid fuel are progressing in UK homes.
UKIFDA CEO Ken Cronin adds: “It’s a busy couple of days, to say the least – and we genuinely cannot wait to engage with exhibitors, members, visitors, and delegates during the exhibition and conference.
“We have all worked extremely hard on the planning of this year’s virtual event and have put together a fantastic line-up of key speakers together with relevant, thought-provoking topics in a range of formats that include presentations, discussions, Q&As and informal exchanges.
“The programmes for the two days will no doubt be fine-tuned between now and 7/8 July but we wanted to share our plans to-date and to encourage as many companies and individuals as possible to join us online and make our first virtual UKIFDA EXPO a huge success. As time gets closer to the event we will be using the conference app more and more to communicate information.”
To register as a delegate please click here.
Being a virtual conference we are able to take bookings to be an exhibitor much closer to the day so it is not too late! For further information please contact Dawn Shakespeare via email.
News
High standards at Prince Petroleum
The Leicestershire-based independent and family-owned distributor, now in its 60th year, has recently been approved for two prestigious accreditations following a project that was first implemented in late 2020. With the company being recognised for excellence in administration systems, having been assessed and approved to ISO 9001 standard, as well as being awarded the Fleet Operators Registration Scheme accreditation we spoke with managing director, David Prince.
News
Driver shortages create barrier
Covid-19 and plummeting oil prices are two of the most substantial challenges that the fuel oil distribution sector has faced in the past 12 months. But whilst these were very much in the spotlight, existing challenges continued to present barriers – one of the biggest being driver shortages across the UK and Ireland.
During recent conversations, several distributors have told Fuel Oil News that a shortage in drivers is one of the biggest challenges facing their businesses currently. With an increased workload for many distributors in an unseasonably cold spring, some distributors have had to rely on drivers hired from agencies, although this can sometimes be more of a hindrance than a help.
Carrie Marsh, managing director, Marsh Fuels told us: “We don’t use agency drivers any more after our own experience was that while the ones that came to us had the right ‘piece of paper’ to do the job, they had never put delivery by oil tanker into practise, let alone safely negotiate tight driveways at customer properties. We paid out more in repair bills…”
It is not just distributors that are struggling to fill the skills gap, however. A latest report from Logistics UK highlighted that almost one in ten logistics businesses (9.8%) say the recruitment of drivers is an ‘extreme barrier’ to the recovery of their business. Logistics UK is urging the government to take immediate action to unlock access to these careers for new recruits to the sector, in order to support the recovery of UK PLC.
The pandemic has not helped matters, as Alex Veitch, general manager for public policy at Logistics UK outlines: “Our report shows that 29% of logistics businesses anticipate that they will be unable to fill vacancies for HGV drivers this year; a further 14.5% expect long delays before filling a role. With the logistics industry in urgent need of these workers, Logistics UK is urging the government to provide interest free loans or grants to train or reskill potential employees and help recruit them into the logistics industry. The business group is also urging the Driver and Vehicle Standards Agency (DVSA) to maintain its fast-track programme to catch-up on at least 30,000 driving tests that were postponed due to Covid-19 between March and December 2020; this has left thousands of potential HGV drivers waiting in the wings when the UK needs them most to support every facet of UK PLC.”
Are you struggling with driver shortages? Do you think support from government will help to close this gap? Let us know stephanie@fueloilnews.co.uk
News
Essar Oil UK reports successful financing and governance changes
Essar Oil (UK) Limited (EOUK), which owns and operates the Stanlow Refinery, today announced that it has closed new financial arrangements of over US$850 million. This has allowed EOUK to replace its former credit facility as well as access additional capital, thereby strengthening its financial position.
The funding is made up of liquidity from a diversified range of sources, including bilateral arrangements with many of its key customers on enhanced payment terms and other long-term financings, linked primarily to crude supply.
With these financial arrangements now in place, EOUK has more low-cost liquidity to meet its upcoming requirements and can continue to focus its energies on its transition to become a “Low Carbon Energy Provider” of the future. EOUK is already working on delivering two blue hydrogen production hubs at Stanlow, which will attract £750 million in total investment.
Find out more about Essar’s transition to becoming a ‘Low Carbon Energy Provider’ of the future here.
Follow-on capacity growth is planned to work towards the Government’s new target of 5GW of low carbon hydrogen for power, transport, industry and homes. Stanlow is committed to reaching 80% of the Government-set targets. In addition, EOUK remains committed to delivering the necessary operational cost reductions at the refinery over the course of the coming year in order to help secure its long-term future and to ensure it remains competitive in its traditional refining business.
EOUK has also recently completed a review and update of its corporate governance and its board has adopted the recommendations arising out of that review process, which included independent input from Ashurst LLP. As a result of that process, the board has committed to appointing two independent non-executive directors to the board.
Commenting on the recent developments, chairman Prashant Ruia said: “Securing this financing demonstrates the confidence all our stakeholders have in our long-term vision for Stanlow.
“We believe this confidence will be further bolstered by the updates we have made to our corporate governance, which includes a commitment to appoint two new independent non-executive directors to our board. These appointments will further enhance our overall governance and risk assessment processes, as well as providing insights and strategic inputs to the business as it continues its transition to low carbon operations.
“With a strong economic recovery driven by the UK Government’s roadmap out of the pandemic, I feel that our business has moved into a positive and progressive phase for the benefit of all of our stakeholders and employees. We look forward to furthering our investments in exciting new technologies, securing high-tech jobs and the Stanlow’s future at the heart of the UK’s green revolution.”
News
Cyberattack effect on oil prices
The second week in May saw the largest pipeline in the United States shut down for five days after the operator of Colonial Pipeline was hit by a ransomware attack by Russian criminal group, DarkSide, as named by the FBI, forcing it to shut down all pipeline operations.
The pipeline carries gasoline and other fuel between Texas and Northeastern states, delivering, according to Colonial Pipeline, around 45% of the fuel used on the East Coast. Reported as the worst assault to date against US critical infrastructure, the attack underscores serious vulnerabilities within US infrastructure.
Why do oil prices vary?
Oil prices vary from day to day, but when an unexpected event occurs that causes disruption in the supply chain, drastic variations can be the result. We’ve mostly recently witnessed this with the Covid-19 outbreak, where oil prices plummeted because of decreasing demand, only to become more stable when supply was reduced.
With demand returning to normal, as the majority of the world comes out of lockdown, the closure of the pipeline has the reverse effect, resulting in the oil price to increase.
Mike Johnson, general manager, Portland Fuel said:
“The cyberattack saw WTI oil futures (North America’s primary crude benchmark) spike to $65.50/bbl, close to a two-month high, after the pipeline was shut down to contain the impact of the attack, causing concerns over security of supply.
“The majority of US refining capacity is located on the Gulf Coast, meaning the East Coast is heavily reliant on transportation via the pipeline, which carries 2.5-3mbpd of refined product from Houston to New York (around 45% of the East Coast’s refined product supply). Any prolonged period of downtime would therefore cause significant issues around the availability of refined product in the region – associated concerns saw domestic gasoline prices increase by around 2% as a result.
“As a domestic distribution network of refined product, opposed to crude, the wider impact on global oil prices was lessened, for example Brent crude prices increased slightly by c. $0.75/bbl to a high of $69.00/bbl on Friday before dropping back to trade around $68.00/bbl by close of business. However, the attack does highlight the relationship between oil prices and disruption in supply.”
Ian Moore, OMJ also comments on the effects of the supply ‘dislocation’:
“The outage of the Colonial Pipeline linking the US oil production and refinery region in the US Gulf Coast with the US demand region of the US East Coast is a supply dislocation rather than supply outage. This is because the oil which is normally pumped into the pipeline is still being produced and shipped and stored elsewhere. For example, the major producers in the US Gulf Coast are reported as having hired tankers to store oil they cannot pump. In addition, traders can ship additional product from Europe to the US East Coast. This is not a new phenomenon and shipping gasoline from Europe to the US is well established.
“During the 1970s-1990s, the oil market was largely focused on Middle East tensions. However, with the rise in US shale production, Middle East supply is of lesser importance. In addition, the move to a low carbon economy will further reduce the impact of oil outages.”
Commenting further on the relationship between oil prices and supply disruption, Portland Analytics highlighted that this was recently demonstrated during the week-long blockage of the Suez Canal by the MV Ever Given container ship, which saw Brent crude prices rise c. $5.00/bbl across the week of the grounding. Further back, geopolitical instability around the Strait of Hormuz, a key Middle Eastern oil shipping route, saw a prolonged period of volatile crude prices in the Summer of 2019 after the seizure of UK and Iranian oil tankers in the region.
In short, disruption in global crude/refined product transportation can affect oil prices due to the impact on the balance of supply and demand; if supply is limited and cannot meet demand as a result, prices generally rise. Although both crude indexes swiftly returned to their previous levels after it became evident the outage would not be sustained, the attack represents a short-lived example of the impact a lapse in security of supply can have on oil markets.
Looking forward, Ian comments on the potential future effects on oil prices:
“The most worrying geopolitical event might not be the occasional pipeline attack caused by a bomb blast or computer virus but rather a conflict in the South China Sea between the US and China over Taiwan or some other nation in the region which depends on the US for its security.”
News
Oil price rises over $70 a barrel
This month once again saw the price of Brent crude hit $70 a barrel – it’s highest level in two months.
Having first recovered to pre-pandemic levels in February of this year after slumping below $20 a barrel last April as the impact of Covid-19 and lockdown restrictions resulted in significant reductions in fuel demand, the international oil benchmark is now comfortably back at its pre-pandemic level.
All the signs are pointing to an increase in oil demand in Q3 and Q4 this year as the vaccine rollout continues and lockdown restrictions continue to be eased meaning traders are willing to bet on a more positive economic outlook.
Brent rose as much as 1.1 percent at $70.24 a barrel in early London trading, and despite later falling back slightly to $68.65 is it still up about a third for the year-to-date.
“The euphoria is reflected in the general belief that the economic revival will be soon coupled with oil demand recovery,” said Tamas Varga, an analyst at PVM oil brokerage in London. He cautioned, however, that the recovery still faced headwinds such as the emergence of the coronavirus variant first identified in India.
The International Energy Agency announced this week that all new oil and gas exploration projects must stop from this year if the world is to have any chance of hitting the target of limiting global warming to 1.5C above pre-industrial levels. With environmental drivers already seeing oil majors scaling back investment in future production and demand for oil expected to peak sometime in the next decade it is possible that future volumes may not keep pace with future demand increases. And this concern over supply is contributing to the current oil price gains.
Having reduced output through the pandemic, Opec and other large oil producers are slowly starting to add barrels back to the market as consumption increases, but it remains uncertain whether there is sufficient spare capacity should demand start to rise significantly above its pre-pandemic level of about 100m barrels a day.
The recovery in oil demand is still expected to be uneven for the next few months.