Intercontinental announces formation of 10x Group
IntercontinentalExchange (Intercontinental), a global electronic commodity trading platform, announced the formation of the 10x Group, a market data services company with offices in Houston and London. The 10x group has been established to address the commodity industry’s need for verifiable, transparent and timely market data, according to the company. The company will operate autonomously from Intercontinental, with third-party market news and commentary. Martin Wadhwani, previously the head of Reuters’ Commodity and Energy Information Group, will lead the 10x Group.
S&P releases gas industry report card
Among the key issues that determine credit quality in the global oil and gas industry are merger and acquisition activity, sovereign risk, and pricing assumptions, according to a report released by Standard & Poor’s (S&P) Rating Services. The comprehensive report covers each sector of the industry, including exploration and production, refining and marketing, oilfield services, and contract drilling. “Industry Report Card: Global Oil and Gas,” is available on RatingsDirect, Standard & Poor’s Web-based credit research and analysis system, or at their public Web site at www.standardandpoors.com.
AEP axes traders, downsizes
According to news reports, shares of American Electric Power (AEP) plummeted in October after the company stated it would fire five traders for providing “inaccurate price information” to trade media for use in indexes. AEP executive vice president Eric van der Walde stated, “We did not approve, and we do not condone, this sort of activity.”
AEP also stated plans to reduce its exposure to speculative energy trading markets by downsizing its trading and wholesale marketing operation. The company did not provide headcount numbers in their statement. AEP president, chairman, and CEO E. Linn Draper did state that “this decision doesn’t reflect a lack of confidence in the competence or integrity of our trading operations. We do expect a reduction in the number of employees in that business, but I anticipate that many will remain with the company.”
El Paso says FERC ruling sets dangerous precedent
El Paso Corp., a natural gas pipeline company, told federal regulators a ruling that an El Paso pipeline deliberately withheld supplies during the California energy crisis sets a dangerous precedent for all U.S. pipelines. El Paso said the ruling last month by an administrative law judge ignored “overwhelming evidence” that El Paso made as much pipeline capacity available to shippers as it safely could. It also claims that the judge’s ruling wrongly interferes with each company’s right to determine how much natural gas pipeline pressure is safe. California claims that its utilities were overcharged by as much as $3.3 billion for natural gas to fuel their plants because of El Paso’s actions. FERC Judge Curtis Wagner ruled that El Paso wrongly capped shipments at just 79 percent of capacity between November 2000 and March 2001, a period when California was reeling from blackouts. Houston-based El Paso formally challenged the decision in documents submitted to the four political appointees on the Federal Energy Regulatory Commission. El Paso has mounted an aggressive campaign since the FERC judge’s decision last month, which sent its shares plunging to a 10-year low and wiped out about $4 billion in market capitalization. The company bought a full-page advertisement in the Washington Post and has lobbied lawmakers to help it fight the decision. El Paso is also demanding that FERC’s commissioners hold a rare session in late November to hear legal arguments challenging the ruling. (Under FERC rules, the commissioners can accept, reject or modify an administrative judge’s initial ruling.)
Aquila to cut another 200 jobs by end of year
Aquila Inc. plans to cut about 200 more jobs by the end of the year as the utility moves away from energy dealing, said CEO Richard Green Jr. With those cuts and others, the company said it will have shed nearly 25 percent of its work force by the end of the year. The company began the year with about 7,300 employees. So far, 1,015 employees have been laid off and another 580 have left voluntarily or work for companies that Aquila sold to raise money. Green also said that Aquila will end up selling more than $1 billion in assets, which will reduce debt, but at a cost. He said the company would have a $127 million loss on the deals.
