Iberdrola's green spending spree eclipses European Big Oil's plans

Iberdrola to invest £67 billion in 'energy revolution' by 2025

Scottish Power outlines new £10bn investment in green energy

Iberdrola's green spending spree eclipses European Big Oil's plans

FILE PHOTO: berdrola CEO, Jose Ignacio Galan speaks during a press conference

near Ribeira da Pena

Thu, 5 November 2020

By Ron Bousso

LONDON (Reuters) - Spanish wind energy group Iberdrola's plans to spend around $88 billion (67.5 billion pounds) on renewable power by 2025 eclipse Europe's top oil companies' combined planned investments in low-carbon over the same period.

Royal Dutch Shell, BP, Total, Norway's Equinor, Spain's Repsol and Italy's Eni aim to grow their low-carbon businesses after setting out plans to sharply reduce greenhouse gas emissions in the coming decades.

The group's combined spending on renewables such as offshore wind and solar power as well as retail businesses in some cases is set to grow nearly 10-fold over the next five years from $7.35 billion in 2020 to $69.2 billion by 2025, according to company announcements and Reuters estimates.

Iberdrola said on Thursday it plans to invest 75 billion euros (67.7 billion pounds) in its renewable energy production, grids and retail business by 2025 to capitalise on growing global demand for clean power.

Goldman Sachs estimates that Europe's Big Oil companies could spend close to half of their capital expenditure on low carbon activities compared with 10% to 15% in 2019.

Their installed power capacity is expected to grow 20 fold from 7 gigawatt (GW) currently to over 140 GW by 2030, the bank said in a note in September.

For an interactive version of this chart see https://tmsnrt.rs/3p2kPvg 

Graphic: Green spending spree - https://graphics.reuters.com/EUROPE-CAPEX/qmypmjzbavr/chart.png

(Reporting by Ron Bousso; Editing by Kirsten Donovan)

Iberdrola to invest £67 billion in 'energy revolution' by 2025


Iberdrola to invest £67 billion in 'energy revolution' by 2025An Iberdrola's power generating wind turbine is seen against cloudy sky at Moranchon wind farm


By Isla Binnie  
Thu, 5 November 2020, 

MADRID (Reuters) - Spanish wind energy group Iberdrola <IBE.MC> plans to invest 75 billion euros (67.7 billion pounds) in its renewable energy production, grids and retail operations by 2025 to capitalise on growing global demand for clean power, it said on Thursday.

Countries and companies the world over are seeking to cut emissions to combat climate change, buoying renewables-focused companies including Iberdrola.

Pursuing the opportunities created by the "energy revolution" facing the world's major economies should help to boost net profit by more than 40% from 2019 to 5 billion euros in 2025, Iberdrola said.

Shares rose throughout morning trade and were up 3.1% on the day at 1300 GMT, outperforming a positive Spanish stock index <.IBEX> and taking Iberdrola's gains so far this year to around a quarter. It has become Spain's second biggest company after Zara owner Inditex <ITX.MC>.

For years, renewable companies have struggled to generate big profits, while fossil fuels have provided easier margins, but as COVID-19 lockdowns have hobbled energy use and hammered oil and gas markets, the investment focus has been transformed.

Oil and gas companies, including Royal Dutch Shell <RDSa.L>, BP <BP.L> and Total <TOTF.PA>, are moving towards renewable power, but Iberdrola's new spending plan eclipses their combined planned investments in low carbon.

Other utilities are joining Iberdrola in building green capacity and wind energy is set to reach record growth globally over the next five years.

Denmark's Orsted <ORSTED.CO> is in the midst of a $30 billion investment plan and Italy-based Enel <ENEI.MI>, the region's leader, has set aside 14.4 billion euros to build renewables capacity and phase out coal between 2020 and 2022.

Iberdrola promises steady earnings for its shareholders.

They will receive between 0.40 and 0.44 euros per share by 2025 as the company sets aside a total of 94 billion euros for both the investment plan and its dividend plan, Iberdrola Chief Financial Officer Jose Sainz said.

The money will mainly come from operations and cash management, but 19% will be from taking on debt, Sainz said.

Half the overall investment will be split between the United States, where it announced last month its local unit Avangrid <AGR.N> would buy utility PNM Resources <PNM.N>, and Britain, where it owns Scottish Power.

At home in Spain, spending, mainly on renewables and networks, will more than double to 14.35 billion euros over the life of the plan.

Iberdrola hopes one costly Spanish project, building capacity to produce hydrogen from renewable sources, will get European Union funds as the bloc seeks to emerge from a coronavirus-induced recession by focusing spending on sustainability.

By 2030 Iberdrola aims to increase solar and onshore wind capacity by 2.5 times and offshore wind power by 4.5 times, to reach a total generation portfolio of 95 gigawatts (GW).

(Reporting by Isla Binnie, additional reporting by Jose Elias Rodriguez; Editing by David Goodman and Barbara Lewis)

Scottish Power outlines new £10bn investment in green energy


August Graham, PA City Reporter
Thu, 5 November 2020, 10:47 am GMT-7·2-min read

Scottish Power is planning to invest another £10 billion into the UK’s green recovery over the next five years, it has revealed.

It comes weeks after Prime Minister Boris Johnson announced big ambitions to power all UK homes with offshore wind.

The company said on Thursday that it will nearly double its renewable generation capacity, adding a further 2.4 gigawatts (GW) by the middle of the decade.

It is part of a larger plan by Scottish Power’s Spanish parent company Iberdrola to pour 75 billion euros (£67.2 billion) into renewables around the world.

The company’s plans will mean new solar, wind and battery infrastructure, and thousands of new jobs spread across the UK, chief executive Keith Anderson said.

“This is a huge, big wave of investment to help drive forward decarbonisation in each of the countries we operate in,” he told the PA news agency.

“We’re all talking in the UK about a green recovery and our view is that it is companies like us that are going to be at the forefront of creating a green recovery, of accelerating the road to net-zero and create jobs and apprenticeship opportunities.”

Last month, Mr Johnson promised all of the UK’s 30 million homes will be powered by offshore wind by the end of this decade.

The UK has a goal of reducing its emissions to net-zero by the middle of the century.

The green ambitions will need several more billions of pounds invested into the UK’s green plans.

“Statements and announcements from the Prime Minister become so important because that’s what sets the ambition and drags companies in and makes this look attractive,” Mr Anderson said.

“One of the best examples of this is that you now see oil and gas companies, companies like Shell saying ‘hang on a minute, we want to come and join the party’.”

UK. extends wage support scheme until March '21 amid new lockdown

USA STILL HAS NO STIMULUS PACKAGE

England begins 4-week lockdown in bid to slow spread of COVID-19

A man passes a closed restaurant in central London as England enters a second coronavirus lockdown on Thursday. (Nikas Halle'n/AFP/Getty Images)

The Associated Press · Posted: Nov 05, 2020 

The British government and the Bank of England joined forces Thursday to provide further support to an economy that is set for a difficult winter following the imposition of new coronavirus lockdown measures.

Hours after the central bank increased its monetary stimulus by a bigger-than-anticipated £150 billion (roughly $256 billion Cdn), Treasury chief Rishi Sunak said the government's salary support program will be extended through March.

The extension of the program, which sees the government pay 80 per cent of the wages of people retained by firms rather than made redundant, comes on the day that England is back in lockdown and the other nations of the U.K. — Scotland, Wales and Northern Ireland — are living under heightened restrictions.


Like other nations in Europe, the U.K. has seen a sharp spike in new cases in recent weeks and on Wednesday recorded another 492 virus-related deaths, the highest daily number since May. Overall, it has Europe's highest official COVID-19 death toll at 47,742.

The Job Retention Scheme, which was introduced alongside the national lockdown in March and helped keep a lid on unemployment, was due to expire at the end of October and to be replaced by a less-generous program.

A worker shuts the doors in a bar in Bristol city centre ahead of England's lockdown. (Ben Birchall/PA/The Associated Press)

However, it was reinstated on Saturday when the government abruptly announced another lockdown for England to last until Dec. 2. The lockdown, which formally came into force on Thursday, will see millions of workers going idle once again as it requires all non-essential venues such as pubs, restaurants, and stores selling items like books, clothing and sneakers, to close. The support package for self-employed workers was also made more generous.

"I've always said I would do whatever it takes to protect jobs and livelihoods across the U.K. and that has meant adapting our support as the path of the virus has changed," Sunak told lawmakers.

"It's clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support."

The government had for months balked at calls for an extension, arguing it wasn't its role to support every job in the economy forever. It was no doubt also concerned about the cost of the program.

While welcoming the move, the main opposition Labour Party criticized Sunak for failing to act sooner, a delay that it said generated uncertainty and prompted some firms to dismiss staff in recent weeks. The government said the furlough scheme could be backdated so anyone who was on a payroll on Sept. 23 but then made redundant can be re-employed.

"This cycle of bluster, denial and then running to catch up is costing jobs and causing chaos," said Labour's economy spokesperson Anneliese Dodds.

The Bank of England warned that the British economy is set for another downturn in the winter but laid out the hope that a recession — widely defined as two straight quarters of contraction — may be avoided. It said the outlook for the economy remains "unusually uncertain."

The latest restrictions will weigh on an economy that had been recovering from the sharp recession caused by the spring lockdown. During the earlier lockdown, the British economy contracted by around a quarter. It recouped some of that during the summer, though the bank said it was still nine per cent smaller than its pre-COVID level at the end of the third quarter.

In a set of new forecasts, the central bank said it now expects that recovery to end and the economy to shrink two per cent in the fourth quarter before rebounding at the beginning of 2021 — assuming the restrictions start to be lifted. As a result of the latest contraction, it now doesn't expect the British economy to reach its pre-COVID level until the first quarter of 2022.

The central bank's increase in the bond-buying program was bigger than the £100 billion (roughly $171 billion Cdn) anticipated in financial markets and is aimed at keeping borrowing rates low to boost lending and ensuring that money keeps flowing through the financial system.

An NHS worker speaks with soldiers as they carry supplies at Pontin's Southport Holiday Park, north of Liverpool, on Thursday prior to assisting in a mass and rapid testing pilot scheme for the novel coronavirus. (Oli Scarff/AFP/Getty Images)

"We believe there is value in acting quickly and strongly to support the economy and avoid the risks of any short-term disruption," bank governor Andrew Bailey told reporters.

The nine-member monetary policy committee, which also unanimously kept its main interest rate at the record low of 0.1 per cent, welcomed the decision by the government to extend the salary support program.

Although the program prevented mass unemployment this year, the jobless rate has edged up from a four-decade low of 3.8 per cent to 4.5 per cent, with the likes of British Airways, Royal Mail and Rolls-Royce all laying off thousands.

On Thursday, supermarket chain Sainsbury's became the latest big company to announce hefty cuts. It said it will shed around 3,500 jobs as part of plans to permanently close its meat, fish and deli counters, as well as some of its Argos standalone stores.

Given the outlook, the Bank of England expects the unemployment rate to rise to a peak of 7.75 per cent in the second quarter of next year.

UK chancellor extends furlough till March and hands self-employed new lifeline

Tom Belger
·Finance and policy reporter
Thu, 5 November 2020

Britain's chancellor of the exchequer Rishi Sunak made another economic policy announcement on Thursday. Photo: John Sibley/Reuters

UK chancellor Rishi Sunak has caved into pressure to extend the furlough scheme once more, promising more generous support until next March for workers in struggling firms.

The finance minister made the latest in a string of recent announcements expanding job support in parliament on Thursday. He confirmed the government’s furlough scheme will continue beyond the current December cut-off across the UK, offering subsidies worth 80% of previous wages for workers on leave.

Employers will only have to pay insurance and pension contributions, with a review in January to see if they should contribute more. Plans for a bonus in February for employers keeping staff post-furlough have been delayed until “an appropriate time.”

The chancellor also announced the self-employed income support scheme (SEISS) would continue to pay 80% of average profits, rather than be cut as previously planned. Meanwhile Sunak promised another £2bn ($2.6bn) in general funding for the UK’s devolved administrations.

“People and business will want to know what comes next,” he told MPs. “They want certainty.”

READ MORE: Bank of England to pump another £150bn ($194bn) into the UK economy

It marks a significant U-turn for the chancellor and prime minister Boris Johnson. Both had repeatedly declared it was time to move on from subsidising furloughed workers in struggling industries. They had already extended furlough by a month to December and agreed recently to make the replacement job support scheme more generous, but only in coronavirus hotspots and at 67% of previous pay.

But the second wave, tighter restrictions and pressure from business and union chiefs have forced a change in stance. Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), had said on Thursday an extension was the “right thing to do,” saying firms needed more certainty and stability to recover.

The chancellor had also faced heavy criticism from political leaders in Scotland, Wales, the North, and the Midlands for only extending furlough and making job support more generous when London and then England faced tighter curbs. Their areas faced restrictions with less aid for employers and jobs.

“I have had to make rapid adjustments to our economic plans as the spread of the virus has accelerated,” said Sunak in defence of the latest changes.

Sunak acknowledged the economic impact of the second England-wide lockdown coming into force on Thursday, after MPs backed a four-week shutdown in a vote on Wednesday.

Sunak told parliament that UK economic recovery was slowing, and the economic impact of England’s lockdown would outlast new restrictions. “Given this significant uncertainty, a worsening economic backdrop, and need to give people and businesses security through winter, I believe it is right to further.”

“Non-essential” shops, hospitality and leisure sites have been forced to close until 2 December. Economists and business groups expect this to take a heavy toll on firms and jobs. Different restrictions apply across the UK, set by devolved administrations.

It comes on the same day the Bank of England ramped up its support even further for the UK’s economy and the government’s finances. The central bank announced it would pump another £150bn ($194bn) into buying up government debt from investors, more than expected by analysts.

READ MORE: Sainsbury's warns 3,500 could lose jobs as it aims to shut 420 Argos stores

Official figures last month showed UK government debt is at its highest level in 60 years compared to the size of the economy. Borrowing has plugged the gap between soaring spending and declining tax receipts, and mass bond-buying by the central bank with newly created money has kept a lid on borrowing costs.

The Bank of England has been institutionally independent from central government for more than two decades, but Sunak said he and the bank’s governor Andrew Bailey were in “constant communication.” He said their measures were “carefully designed to complement each other.”

Furlough scheme extension ‘came too late for some in the culture sector’

Theatres have been hit hard by coronavirus (Dominic Lipinski/PA)


Tom Horton, PA
Thu, 5 November 2020

Job losses in the cultural sector and night-time economy could have been avoided if businesses had been given more warning about the furlough scheme extension, industry figures have said.

On Thursday, Chancellor Rishi Sunak announced the scheme would now continue until the end of March after initially resisting calls for it to be continued.

Theatres Trust director Jon Morgan said the announcement is “fantastic news” for theatres, but job losses “could have been avoided” if venues had previously known they would be in line for support throughout the winter.

“The earlier these things are announced, obviously the better,” he told the PA news agency.

Despite the problems caused by the delay, Mr Morgan said the furlough extension is welcomed by the industry.

He said: “The extension of the job retention scheme is fantastic because when lockdown lifts, some theatres will reopen with social distancing, but really on a loss-leader basis, it is not a long-term solution.

“The vast majority will remain closed and this is going to help them survive during that period until we get to that point where theatres can start to perform to large enough audiences, not necessarily full capacity, but large enough to be able to break even and run viably.”

In August the media union Bectu estimated there had been 5,000 coronavirus-related job losses in the theatre industry.


The furlough scheme pays 80% of wages up to £2,500-a-month and was originally supposed to end in October.

Greater Manchester’s night-time economy adviser Sacha Lord said the extension had been announced too late.

If the action had been taken six weeks ago they could have saved “many, many businesses” and jobs, he told PA.

“When you start a redundancy process, you can’t just phone somebody up and say you are redundant as of tomorrow.

“You have to go through a process, it can take two to maybe a few more weeks and with furlough originally coming to an end this weekend just gone… sadly for many they are now redundant and quite a few people I have spoken to in the last couple of weeks find it a bit of a slap in the face if I’m being honest.”

Lord, who also co-founded the Parklife music festival, added: “It is great but for many it does feel very, very late.”

The extension of the furlough scheme has been welcomed by theatres (Martin Crossick/PA)

Mark Da Vanzo, CEO of the Liverpool Everyman & Playhouse theatres, also said it would have been helpful to have had more warning about the extension.

“I think it would have been good to know a little earlier, just so it connected up because the current furlough ended at the end of October.

“So I think it would have been good to know earlier but ultimately from our point of view as an employer, it is good whenever it has come.

“At least it has come.”

The furlough extension was welcomed by trade body UK Music’s chief executive Jamie Njoku-Goodwin.

In a statement, he said: “The music industry has expressed concerns about the level of support on offer – and so the Chancellor deserves enormous credit for listening to those concerns and taking action.

“Today’s announcement will give businesses the certainty they need so they can plan for the next few months and the extension of the furlough scheme will be welcome news to many in the music industry.

“However, there are still many self-employed workers in our sector who have fallen through the cracks and been ineligible for support. We are braced for the impact of Covid-19 to continue for many months, and so those people will need help.

“Our overriding priority is to help support the 190,000 people in the music industry workforce, so our sector can get back on its feet as quickly as possible and continue contributing billions of pounds to the economy.”

Earlier on Thursday, Mr Sunak said: “We’re dealing with a fast-moving health crisis first and foremost, and I think it’s reasonable and right that when the health situation changes and new restrictions need to be put in place, that our economic response, adapts and evolves alongside that.”

The Government is currently distributing a £1.57 billion funding package to the arts.

Little improvement in US jobless claims before vote

Thu, 5 November 2020

Jobless claims showed little improvement in the week before US President Donald Trump stood for reelection against his challenger Joe Biden

New US jobless claim data released Thursday showed little improvement in the week before President Donald Trump stood for reelection against challenger Joe Biden, indicating widespread unemployment persists months after business shutdowns to stop Covid-19 began.

The Labor Department reported 751,000 seasonally adjusted new applications filed in the week ended October 31, more than expected and essentially flat from the previous week's upwardly revised rate.

Jobless claims spiked into the millions beginning in March after businesses began shutting down to stop Covid-19 from spreading, and while they've since dropped dramatically, the latest reading remains above the worst single week of the 2008-2010 global financial crisis.

Trump presided over an expanding economy that achieved record low unemployment until the business shutdowns began, and while vote counting hasn't been completed, Biden has pulled ahead in several key states needed to win the presidency.

As Covid-19 cases surge across the nation, analysts warn of a deteriorating economic situation as the year draws to a close.

"The labor market remains under stress from an elevated pace of layoffs," Rubeela Farooqi of High Frequency Economics said.

"A resurgence in virus cases that will result in business closures and job losses will further damage the labor market and will slow the pace of rebound going forward."

The data showed an additional 362,883 people, not seasonally adjusted, filing under a special program for workers not normally eligible for aid.

All told, more than 21.5 million people were receiving government benefits as of the week ended October 17, the latest week for which data was available.

The data also showed the number of people receiving benefits under the Pandemic Emergency Unemployment Compensation program designed for long-term joblessness rising by 277,564 to nearly four million, indicating many people were having trouble finding work.

The data was released one day after the United States reported more than 99,000 new coronavirus cases, worsening what is already the world's largest outbreak.

Also worrying analysts is Congress's failure to pass another spending package to bolster the economy's recovery, with the expanded unemployment programs set to lapse at the end of the year.

"The initial unemployment number not falling as much as expected is just the tip of the iceberg, as the economy's ability to add jobs and keep people off assistance is quickly weakening," Robert Frick of Navy Federal Credit Union said.

"More stimulus is needed to help these Americans and keep the unemployment numbers from starting to rise."

cs/bfm

Up to 700 manufacturing jobs to go in Northern Ireland


Michael McHugh, PA
Thu, 5 November 2020

Up to 700 manufacturing workers are in line to lose their jobs in Northern Ireland.
Some roles at Caterpillar in the Co Antrim town of Larne may be outsourced to India and employees’ representatives dubbed it a “scandalous profit grab” at the expense of local staff.

First Minister Arlene Foster expressed her sympathy for the workers and their families, and said the Executive will “look to see what we can do to help”.

“This is a global restructuring, Caterpillar have always been a very good company to work with, we’ll continue to work with Caterpillar,” she said.

“As I understand it, it is a relocation of some business to other parts of the world, I regret that. There is a need for us to absolutely engage and see what it is we can do to help.”

Deputy First Minister Michelle O’Neill described the move as a “huge blow to the workers and their families”, and echoed Ms Foster pledge to try to help.

Unite the union’s George Brash said some people had spent 30 years with the generator-building firm.

He said: “They are absolutely devastated that in the midst of a pandemic what we are looking at is jobs lost in the mouth of Christmas.”

The process is expected to be completed within 18 months and is designed to ensure the competitive future of the multinational firm.

Consultations with workers’ unions begin next week.

The announcement is part of the company’s plans to better utilise existing capacity and improve cost competitiveness.

Managers said the proposal was unrelated to Brexit or Covid-19.

Mr Brash said: “That is families, that is Larne, that is the wider community that is going to take a hit.

“They are angry that potentially jobs could be outsourced to foreign countries.”

The union’s regional officer said the workforce was highly skilled and motivated and added it would be unacceptable if some of the positions were moved to India.

He hoped there would be opportunities for redeployment or alternative work.

“They are on a slippery slope when there are 700 jobs at risk.

“The fear for the workers is that this is just the first of other announcements.”

Larne is a port town and major industrial base in East Antrim.

Northern Ireland has lost a host of manufacturing jobs in recent years including a major tyre manufacturer in the wider Co Antrim area.

Co Antrim’s Wrightbus, the firm which built London’s doubledecker Routemaster buses, was saved from liquidation this time last year with some 1,200 jobs hanging in the balance.

Stormont assembly member John Stewart said Caterpillar’s announcement had come completely out of the blue and caused deep worry locally.

“To take 700 workers out of this small, average-sized town of Larne will have a huge impact, that is undoubtedly the case and there are a lot of people really fearful about what the future will bring in terms of that.”

Caterpillar is an Illinois-based heavy machinery maker working in areas like mining.

Its manufacturing facility in Springvale in Belfast will not be affected by the job cuts.

The total number of employees in Northern Ireland is currently about 1,600.

Joe Creed, vice president of Caterpillar’s electric power division, said: “We recognise that what we are considering is difficult for our employees, their families and the community.

“We do not take these contemplations lightly; however, we must plan for future business needs to be competitive.”

Mayor of Mid and East Antrim council, Councillor Peter Johnston, said they were working closely with the firm and would do everything they could to support those affected.

“Caterpillar is a major employer within our local economy, and is a giant of our manufacturing sector.

“The wider economic benefit it provides is hugely significant, including the supply chain.”

Shell closing Convent, Louisiana, refinery as pandemic takes toll

Thu, 5 November 2020

Filled oil drums are seen at Royal Dutch Shell Plc's lubricants blending plant in the town of Torzhok


By Laura Sanicola

(Reuters) - Royal Dutch Shell <RDSa.L> said on Thursday it was closing its refinery in Convent, Louisiana, the largest such U.S. facility and first on the U.S. Gulf Coast to shut down since the coronavirus pandemic devastated worldwide demand.

The shutdown will occur this month after Shell failed to find a buyer.

The refinery is the ninth in North America targeted for a shutdown or to be idled since the pandemic, which has dealt a heavy blow to fuel demand globally. The United States is the world's largest fuel consumer.

Shell said it failed to find a buyer for the 211,000-barrel-per-day refinery after announcing plans to sell it in July.

“After looking at all aspects of our business, including financial performance, we made the difficult decision to shut down the site,” Shell spokesman Curtis Smith said in an emailed statement.

Refining margins have been down substantially since the pandemic started. The gasoline refining margin is currently at $8.79 per barrel, below the threshold where most refiners can profit.

Once the shutdown is complete, Shell will continue to try to divest the refinery, the company said. It expects to sell all but six refineries and chemical plants globally and is considering closing facilities it cannot sell, the company told investors on its quarterly earnings call this week.

"We recognize the market is not great at the moment in terms of divesting assets ... if it's not possible, we'll consider closing and shutting down. That's ultimately, the last option we'd like to pull," said Chief Financial Officer Jessica Uhl.

The company said in 2019 it would structure its operations to match the future market for downstream products with a focus on its chemicals business.

In February, Shell sold its 156,400 bpd Martinez, California, refinery and logistics assets to PBF Energy for $960 million (£731 million) plus the price for oil and refined products on hand.

Shell said it will open a selective voluntary severance program to potentially create other roles for workers.

Convent's closure adds to the almost 2 million bpd of refinery capacity globally that has been permanently shuttered globally due to the coronavirus pandemic.

Another 1.4 million bpd is temporarily out of commission or being converted in terminal and other facilities, U.S. refiner Phillips 66 said on its third quarter earnings call earlier this week.

Late last month PBF Energy <PBF.N> said it will shut most refining units at its Paulsboro, New Jersey, refinery.

Elsewhere, Canada’s Come-by-Chance plant in Newfoundland and Labrador has been idled since May. HollyFrontier <HFC.N> shut down its Cheyenne, Wyoming, refinery, Marathon Petroleum <MPC.N> began closing refineries in Martinez, California, and Gallup, New Mexico, while Calcasieu Refining <CRC.UL> idled its Lake Charles refinery in southwest Louisiana.

Phillips 66 announced plans to shut its plant in Arroyo Grande, California, in 2023 and plans to reconfigure its San Francisco Refinery to produce renewable fuels.

SELLING AN IDLED REFINERY

It is unusual for an oil company to sell a refinery that it has already idled, in part because the value of the asset is deemed to be lower if it is not operating.

North Atlantic Refinery Limited is actively trying to sell its Come-by-Chance refinery, after a deal with Irving Oil fell through last month for undisclosed reasons.

"Refineries aren't light switches, they're extremely expensive to shut and restart," said Zachary Rogers, senior oil analyst at Rapidan Energy Group.

"The fact it's shutting down (for however long) underscores the weakness of refining economics as COVID persists," he added.

(Reporting by Laura Sanicola; Additional reporting by Devika Krishna Kumar; Editing by Dan Grebler and Tom Brown)



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Sorry Sainsbury's, but the pandemic also created a financial windfall


Nils Pratley
Thu, 5 November 2020

Photograph: Alicia Canter/The Guardian

Another day, another supermarket chief executive pleading that his company somehow deserves its business rates freebie because it’s had to suffer extra costs in “feeding the nation”. All that hand sanitiser, plus the burden of paying so many staff to shield at home, adds up, don’t you know?

Simon Roberts of Sainsbury’s offered other arguments: in the age of Amazon, the business rates system is unfair on bricks and mortar retailers. As if to reinforce his point, he unveiled plans to shut the doors permanently on 420 Argos standalone shops, with the potential loss of 3,500 jobs.

You can understand why he’s so prickly. The symmetry is awkward: Sainsbury’s received relief on business rates worth £230m in the first half of its financial year, and now it’s paying £231m in dividends to shareholders. Since the Qatar Investment Authority, with a 21% stake, will be the biggest beneficiary, it’s not too much of a stretch to say Sainsbury’s is also feeding the nation of Qatar with dividends.

To be scrupulously fair, a few of Roberts’ points were accurate. Yes, the business rates system is rotten. Yes, the biggest chunk of the divi, worth £160m, relates to the pre-Covid financial period. And, yes, one shouldn’t mix apples and pears: dividends and relief on rates are different items.

But those arguments all miss the glaring inconsistency at heart of this issue. Rishi Sunak gave retailers relief on a property-based tax because most shops had to close during the first lockdown. But supermarkets remained open and, indeed, enjoyed a boom. They should never have been included in the rates giveaway.

Sainsbury’s revenues, like Tesco’s and Morrisons’, were the strongest in years. With the rates freebie covering most of the extra Covid costs, Sainsbury’s underlying pre-tax profits surged by 26% to £301m in the half-year. The pandemic created a logistical challenge, but also a financial windfall.

The mistake is really the chancellor’s, of course. Over a full year, the supermarket industry will benefit from rates relief worth roughly £1.5bn, money that would surely have been better directed at the hospitality or events industries. There is roughly zero chance of Sainsbury’s, Tesco or Morrisons’s returning a few quid to the Treasury – but they should.
WH Smith board joins list of indecent packages

Remuneration committees need to calm down. The pandemic has crumpled a lot of companies’ share prices, and thus the value of many executives’ share-based incentives. But the apparent rush to reload directors with new bumper pay packages is indecent.

The latest example is WH Smith. The board had the notion that now would be a fine moment to hand the chief executive, Carl Cowling, a share-incentive package worth almost £5m, Sky News reported on Thursday.

The thin justification, it seems, was that there’s a big rebuilding job to do at WH Smith after the hit to the stores in airports and train stations; a three-year arrangement, in place of annual awards, would keep Cowling keen for the long-term, went the thinking.

Forget it. The board cannot possibly know when normal service will resume in the travel market. WH Smith had to raise £165m from shareholders for pandemic protection as recently as April. Setting fair performance hurdles is virtually impossible at the moment.

Fund managers killed the board’s proposal before it could become formalised – quite right too. A £5m package would have been wildly over the top in the current climate. If Cowling has to rub along for a while on his basic salary of £525,000, so be it.
Insurers don’t stir patriotic feelings

Stephen Hester’s decluttering and cost-cutting strategy at RSA, the FTSE 100 insurer, always seemed designed to attract a bid, and now it’s happened. Canada’s Intact Financial and Denmark’s Tryg are in talks to agree a joint-offer at £7.1bn.

RSA’s board says it’s minded to accept, which is no surprise whatsoever. At 685p a share, the bid would equate to a takeover premium of roughly 50%, which doesn’t come along often in the insurance game.

Nor, one suspects, will there be any wailing over the loss of a large British company to an overseas predator. Insurers don’t stir patriotic feelings. Nobody was bothered back in 2015 when Zurich attempted a bid for RSA before walking away.

It feels a shame, though. RSA has had setbacks in the last couple of years. But, slimmed to its UK, Canada and Scandinavia core, it looked a more coherent and promising set-up than, say, Aviva. Too late now.

 

UK Job losses: Major cuts since the start of the pandemicPA City Staff

Thu, 5 November 2020

At least 4,200 major job redundancies were announced on Thursday as the Covid-19 pandemic continues to ravage the country.

Sainsbury’s said that it would axe 3,500 jobs, while US giant Caterpillar is set to cut 700 jobs in Northern Ireland, according to reports.

Rolls-Royce also plans to cut 1,400 jobs in the UK, however this is part of a 9,000 jobs cut already announced in May

It adds to more than 200,000 job losses since the start of the pandemic.

Here is a list of some of the major British employers that have announced major cuts since the start of the lockdown.

– Major potential job losses announced since March 23: 

Total: 248,385

November 5 – Sainsbury’s – 3,500
November 5 – Caterpillar – 700
November 4 – John Lewis Partnership – 1,500
November 4 – Lloyds – 1,070
October 29 – Pizza Express – 1,300
October 27 – Revolution Bars – 130
October 16 – Pret a Manger – 400
October 15 – Marston’s – 2,150
October 14 – Gourmet Burger Kitchen – 362
October 9 – Edinburgh Woollen Mill – 24,000 at risk
October 8 – National Trust – 1,300
October 8 – HSS Hire – 300
October 7 – Manchester Airport Group – 892
October 7 – Greene King – 800
October 6 – Virgin Money – 400
October 6 – Vp – 150
October 5 – Cineworld – 5,500 (many cuts likely to be temporary)
September 30 – TSB – 900
September 30 – Shell – 9,000 worldwide
September 29 – Ferguson – 1,200
September 22 – Wetherspoon – 400 to 450
September 22 – Whitbread – 6,000
September 18 – Investec – 210
September 15 – Waitrose – 124
September 14 – London City Airport – 239
September 9 – Lloyds Bank – 865
September 9 – Pizza Hut – 450
September 4 – Virgin Atlantic – 1,150
September 3 – Costa – 1,650
August 27 – Pret a Manger – 2,800 (includes 1,000 announced on July 6)
August 26 – Gatwick Airport – 600
August 25 – Co-operative Bank – 350
August 20 – Alexander Dennis – 650
August 18 – Bombardier – 95
August 18 – Marks & Spencer – 7,000
August 14 – Yo! Sushi – 250
August 14 – River Island – 350
August 12 – NatWest – 550
August 11 – InterContinental Hotels – 650 worldwide
August 11 – Debenhams – 2,500
August 7 – Evening Standard – 115
August 6 – Travelex – 1,300
August 6 – Wetherspoons – 110 to 130
August 5 – M&Co – 380
August 5 – Arsenal FC – 55
August 5 – WH Smith – 1,500
August 4 – Dixons Carphone – 800
August 4 – Pizza Express – 1,100 at risk
August 3 – Hays Travel – up to 878
August 3 – DW Sports – 1,700 at risk
July 31 – Byron – 651
July 30 – Pendragon – 1,800
July 29 – Waterstones – unknown number of head office roles
July 28 – Selfridges – 450
July 27 – Oak Furnitureland – 163 at risk
July 23 – Dyson – 600 in UK, 300 overseas
July 22 – Mears – fewer than 200
July 20 – Marks & Spencer – 950 at risk
July 17 – Azzurri Group (owns Zizzi and Ask Italian) – up to 1,200
July 16 – Genting – 1,642 at risk
July 16 – Burberry – 150 in UK, 350 overseas
July 15 – Banks Mining – 250 at risk
July 15 – Buzz Bingo – 573 at risk
July 14 – Vertu – 345
July 14 – DFS – up to 200 at risk
July 9 – General Electric – 369
July 9 – Eurostar – unknown number
July 9 – Boots – 4,000
July 9 – John Lewis – 1,300 at risk
July 9 – Burger King – 1,600 at risk
July 7 – Reach (owns Daily Mirror and Daily Express newspapers) – 550
July 6 – Pret a Manger – 1,000 at risk
July 2 – Casual Dining Group (owns Bella Italia and Cafe Rouge) – 1,909
July 1 – SSP (owns Upper Crust) – 5,000 at risk
July 1 – Arcadia (owns TopShop) – 500
July 1 – Harrods – 700
July 1 – Virgin Money – 300
June 30 – Airbus – 1,700
June 30 – TM Lewin – 600
June 30 – Smiths Group – “some job losses”
June 25 – Royal Mail – 2,000
June 24 – Jet2 – 102
June 24 – Swissport – 4,556
June 24 – Crest Nicholson – 130
June 23 – Shoe Zone – unknown number of jobs in head office
June 19 – Aer Lingus – 500
June 17 – HSBC – unknown number of jobs in UK, 35,000 worldwide
June 15 – Jaguar Land Rover – 1,100
June 15 – Travis Perkins – 2,500
June 12 – Le Pain Quotidien – 200
June 11 – Heathrow – at least 500
June 11 – Bombardier – 600
June 11 – Johnson Matthey – 2,500
June 11 – Centrica – 5,000
June 10 – Quiz – 93
June 10 – The Restaurant Group (owns Frankie and Benny’s) – 3,000
June 10 – Monsoon Accessorise – 545
June 10 – Everest Windows – 188
June 8 – BP – 10,000 worldwide
June 8 – Mulberry – 375
June 5 – Victoria’s Secret – 800 at risk
June 5 – Bentley – 1,000
June 4 – Aston Martin – 500
June 4 – Lookers – 1,500
May 29 – Belfast International Airport – 45
May 28 – Debenhams (in second announcement) – “hundreds” of jobs
May 28 – EasyJet – 4,500 worldwide
May 26 – McLaren – 1,200
May 22 – Carluccio’s – 1,000
May 21 – Clarks – 900
May 20 – Rolls-Royce – 9,000
May 20 – Bovis Homes – unknown number
May 19 – Ovo Energy – 2,600
May 19 – Antler – 164
May 15 – JCB – 950 at risk
May 13 – Tui – 8,000 worldwide
May 12 – Carnival UK (owns P&O Cruises and Cunard) – 450
May 11 – P&O Ferries – 1,100 worldwide
May 5 – Virgin Atlantic – 3,150
May 1 – Ryanair – 3,000 worldwide
April 30 – Oasis Warehouse – 1,800
April 29 – WPP – unknown number
April 28 – British Airways – 12,000
April 23 – Safran Seats – 400
April 23 – Meggitt – 1,800 worldwide
April 21 – Cath Kidston – 900
April 17 – Debenhams – 422
March 31 – Laura Ashley – 268
March 30 – BrightHouse – 2,400 at risk
March 27 – Chiquito – 1,500 at risk.

Rolls-Royce axing nearly 1,400 jobs under major overhaul

Holly Williams, PA Deputy City Editor
Thu, 5 November 2020,



Nearly 1,400 jobs are being cut in the UK and globally at engine maker Rolls-Royce as it continues to swing the axe under a plan to slash its workforce by 9,000.

The Derby-based group confirmed proposals to cut around 1,370 jobs worldwide in its civil aerospace division, with 950 going across its organisational structure, largely affecting managers, and 420 across global facilities.

It said the job losses come as part of the 9,000 revealed in May, over 3,000 of which are in the UK, under a major reorganisation in the face of the pandemic.

Around two-thirds of the firm’s UK employees work in the civil aerospace division, but the group declined to comment on which British sites would feel the brunt of the latest cuts.

The group employs 15,700 civil aerospace staff in the UK, with the division headquartered in Derby and other main locations including Bristol, Solihull and Heathrow.

A Rolls-Royce spokesman said: “The global pandemic has hit our business hard.

“Although we have taken swift action and put many, often painful, mitigation plans in place, we must continue to further reduce our cost base so that we can safeguard the future of Rolls-Royce, return to breakeven and work towards our target of reaching positive cashflow in the second half of 2021.

“We are already undertaking the largest-ever restructuring of our civil aerospace business and have today proposed further measures to protect our business.”

He added: “We have opened up a voluntary severance programme to all civil aerospace employees in the UK.”

Rolls announced a £2 billion investor cash call in October as part of a mammoth package to bolster its balance sheet in the face of the pandemic.

The engine maker announced the rights issue alongside a bond sale to raise at least a further £1 billion, as well as another £2 billion in loan support.

It is also slashing costs across the business to weather the impact on the aerospace sector, which sent it slumping to a £5.4 billion loss in the first half of 2020.

The group, which employs nearly 52,000 globally, had already ditched 4,800 roles by the end of the summer.

And in August, it revealed plans to shut its aerospace factory in Nottinghamshire and merge sites in Lancashire as part of the overhaul.

The firm is planning to close its site in Annesley by the end of 2022 in a move impacting around 120 staff, though the group is hoping most will transfer to its base in Derby.

TikTok denies parent company helps Chinese government spy on and persecute Uighur Muslims


Jon Stone
Thu, 5 November 2020,

TikTok has a Chinese parent company

(Copyright 2020 The Associated Press. All rights reserved)

Social media giant TikTok has denied allegations that its parent company is supplying the China's authoritarian state with surveillance equipment to persecute Uighur Muslims.

Reports dating back to last year accused ByteDance of working with authorities in Xinjiang after it signed a strategic cooperation agreement with the Chinese Ministry of Public Security.

MPs on the House of Commons business committee, who are investigating what role industry has in human rights abuses in the Uighur autonomous region, questioned executives about the issue on Thursday.

Elizabeth Kanter, UK director of government relations and public policy at TikTok, told MPs: "Because of the seriousness of the allegation, I've spoken to colleagues who run the douyin app in China and I can unequivocally deny the allegations against the company.

"ByteDance Ltd nor any of its subsidiaries produce, operate or disseminate any sort of surveillance equipment.

"The company does not have any personnel related to surveillance, so those allegations are false. I was first made aware of the allegations when I read the reports and saw the statements you have made."

TikTok is one of the world's fastest growing social networks has in October surpassed over two billion mobile downloads worldwide. It is the international version of Douyin, a Chinese app with similar functionality that was first released in 2016.

The app, on which users share short videos set to music, has faced criticising in the past for allegedly censoring political content – though the firm denies this is its policy and has attributed high-profile instances of content being delete to errors by its moderators.

US president Donald Trump has said he will ban the app, and it has also been restricted in India in the context of a border dispute between the Indian and Chinese governments.

At the same committee hearing MPs also grilled representatives of clothing retailers on what they were doing to prevent cotton or fabric produced with forced labour of Uighur Muslims from entering their supply chains.

Andrew Reaney, group director of responsible sourcing at online clothes store Boohoo, said the firm was "shocked" at the allegations.

"Our Boohoo code of conduct explicitly prohibits any bonded, forced or involuntary labour in any part of our supply chain," he said.


"We were quite shocked by the revelations around the Uighurs and what's happening in the Xinjiang province.

"One of the things we did was, we wrote to all our suppliers across the supply chain to confirm that we have no manufacturing or fabric links to that particular region.

"That was done and all of our suppliers confirmed that they have no manufacturing or fabric links to that region."

Human rights groups have accused China of mass detention, surveillance and reeducation of Uighur Muslims in the Xinjiang Uighur Autonomous Region (XUAR), with higher estimates claiming as many one million people have been directly persecuted. China denies some of the allegations and says it operates a targeted programme to root out political extremism.

Read more

TikTok will now tell you exactly why your video has been removed

Boohoo, Nike and H&M deny Uighur forced labour in supply chains

Henry Saker-Clark, PA City Reporter
Thu, 5 November 2020

Fashion brands including Boohoo and Nike have denied the use of suppliers or manufacturing in the Xinjiang region of China as they expressed “shock” surrounding allegations regarding the forced labour of Uighur Muslims.

The brands and retailers, which also included H&M and North Face-owner VF, were brought before MPs at the Business, Energy and Industry Strategy (BEIS) committee to address reports that products involving Uighur slave labour could be sold to UK consumers.

Andrew Reaney, group director of responsible sourcing at Boohoo, told MPs at the BEIS select committee that the online retailer was “shocked” by reports regarding the forced labour of Uighur Muslims.

He said: “We were quite shocked by the revelations around the Uighurs and what’s happening in the Xinjiang province.

“We wrote to all our suppliers across the supply chain to confirm that we have no manufacturing or fabric links to that particular region.

“That was done and all of our suppliers confirmed that they have no manufacturing or fabric links to that region.”

Mr Reaney stressed that the online retailer does “not knowingly source any yarn or fabric” from the region, as MPs questioned auditing processes at the business following a row over working conditions in its UK supply chain.

Last month, the company published its full report by Alison Levitt QC, which identified “many failings” but freed it from allegations of deliberately allowing poor conditions and low pay for garment workers.

“It’s a matter of regret from the organisation that we obviously didn’t move as fast as we could have,” Mr Reaney said.

“The purpose of being here today and the Levitt report is to demonstrate our sincerity and commitment to absolute 100% supply chain transparency, irrespective of the source and region, whether its Leicester or whether its China.”

David Savman, head of supply chain at H&M, said the Swedish-based retail group worked with accreditation groups for its supply chain which no longer use cotton from the region following the allegations.

“When these serious allegations came up we made investigations into all of our suppliers,” he told MPs.

“We didn’t find any proof of any breach of our sustainability commitments, where we have very clear guidance of how our ethical processes should happen.”

Later in the committee session, Jaycee Pribulsky, vice president of global footwear sourcing and manufacturing at Nike, said the US group was “deeply concerned” regarding the situation in the Chinese region.

She told MPs: “Nike does not source any raw cotton. And regarding Xinjiang, Nike has confirmed with its suppliers that there are no spun yarns or textiles manufactured in the area in our products.”