Campaigners celebrate Barclays’ decision to stop funding fracking – bank says “no urgency” to sell Third Energy

Barclays Stroud 170506 Rising Up

Barclays in Stroud, 6 May 2017. Photo: Rising Up

Opponents of plans to frack in North Yorkshire have welcomed confirmation by Barclays that it plans to sell its stake in Third Energy “at some point”.

Barclays owns 97% of Third Energy, which has permission to frack for shale gas at its KM8 well at Kirby Misperton in North Yorkshire.

Barclays Chairman, John McFarlane, told shareholders last week that the rundown of what the bank calls non-core assets, including Third Energy, was being accelerated. He said:

“The good news is that non-core closure is now less than two months away”.

Friends of the Earth emailed supporters today describing the decision as “a massive blow for the fracking industry” and urged them to keep up pressure on the bank. The local campaign group, Frack Free Ryedale, said it was “amazing news” and Frack Free South Yorkshire congratulated the bank on what it described as a “momentous decision”.

But a spokesperson for Third Energy said:

“This doesn’t change the situation on the ground. Barclays will sell at some point, as any private equity investor would, but there’s no urgency or deadline.”

And a spokesperson for Barclays said:

“The Chairman reiterated at Wednesday’s AGM that the TE [Third Energy] holding sits in Barclays Non-Core (BNC). BNC was set up three years ago to house assets not core to our strategy, and will be folded back into the Group at the end of June, with c.£25bn of risk-weighted assets (including the TE holding) still on its books.  We will sell our TE holding at some point, though there is no new driver of that or urgency to the situation.”

Over the past two years campaigners have protested at Barclays across the UK. In the past few weeks, branches across southern England have been targeted (DrillOrDrop report).

Monica Gripaios, who lives in Ryedale and campaigns for Frack Free Ryedale, attended Barclays AGM and asked a question to Mr McFarlane, which prompted him to announce plans to dispose of non-core assets.

The decision was confirmed in a statement to investors.

Mrs Gripaios, who also handed in a petition with nearly 70,000 names against the bank’s involvement in Third Energy, said:

“After coming to the AGM for three year running, I was so delighted to hear the chairman say the bank are planning to divest from this area. I hope they will follow through on the promise and this is not an empty commitment. I certainly feel reassured and hope that I don’t have to go back next year”.

Steve Mason of Frack Free Ryedale said:

“This is amazing news! Clearly fracking is a bad investment environmentally, socially and financially, with the majority of political parties in England are now opposed to fracking, I think potential investors should take heed. Where is the long term future of this industry?

“Why would you put money into an industry that is increasingly rejected by communities and could get banned at anytime? I wouldn’t want my investments relying on election results! Especially after what has happened in recent years”.

Frack Free South Yorkshire congratulated the bank. A spokesperson said:

“We have worked with People & Planet, along with other anti-fracking groups and organisations across the country who share our concerns, to persuade Barclays to divest from the fracking industry.

“This is yet another demonstration that repeated visible protest, backed up with logical, sensible well-researched arguments can create positive change.”

Just over a year ago, Third Energy received planning permission to frack at KM8 well. North Yorkshire’s planning committee voted by seven to four in favour of the application, which included plans to produce gas for up to nine years. There were 4,000 objections to the plans and a petition against it of more than 2,500 signatures.

Local campaigners failed in their attempt to challenge the approval at a judicial review. They argued in the High Court that the council should not have advised elected members that they could not legally require Third Energy to pay a financial bond to put right any damage caused by fracking at Kirby Misperton.

The company declared a loss of £3.8m for the year ending December 2015. It also reported that it owed more than £50m to parent and sister companies and that turnover was less than half that of the previous year (DrillOrDrop report).

Frank Colenso, a resident in Ryedale, said today:

“The North Yorkshire County Planners need to have a rethink regarding a bond if the sale of Third Energy finally goes ahead.

“With a net worth in excess of minus £50m, who now is going to pay the bill if anything goes wrong? We will continue to oppose all fracking of any kind in Ryedale, North Yorkshire and the UK to protect health, the landscape, tourism and the community”.

28 replies »

  1. John, your grasp of financials is up to speed again!

    The major banks have been under pressure from multiple sources for some while to sell off those parts of their business which are not core to their banking function. Whether they are loss making or hugely profitable is immaterial, other than to the price they will receive. Maybe, a few shareholders unhappy with interest on their savings have indicated that a bank should not be involved in a business totally adrift from banking where “dusters” are not unknown??
    Maybe those same shareholders will suggest to Lloyds they should not be owning Lex Leasing, but I suspect that one is easier to counter as it provides financial leverage with some of the major motor manufacturers and dealerships.

    The timing of this indication is interesting, but as that is not good news to your cause, it is being conveniently ignored.

    Shame about the N.Sea oil/gas industry about to fold. It must be John, because BP have recently sold off a loss making asset to Ineos.

    I think you will find in both cases, simply one company refocusing and another comes in because the asset has more value to them than the one who has refocused. It’s not unusual, but I recognise the need to keep the foot soldiers excited.

  2. So what are you all worried about John, no need to protest etc., let them get on with the exploration testing and walk away when it is all found to be uneconomic as shown in the 4 year old slide show you refer to. Why do Greenpeas, Enemies of Industry, Lush and you all keep wasting money fighting an industry in the UK which is never going to be economic?

    Does seem a bit odd?

  3. Yes, Paul it is odd! Maybe because in US they have pretty quickly found ways to drive down costs, much to the annoyance of OPEC and others. Maybe it is also because in US they started from scratch (basically) whereas UK will have a huge amount of information and experience to utilise when they get started, which will give rapid financial benefits.

    John keeps repeating this mantra, but can not explain why Ineos would be so keen to invest such significant amounts of money into UK shale when they have an inside track to all current and future gas prices from all world sources. The ball is passed to refracktion, and he is sure that the answer is that Jim Ratcliffe has done his sums wrong, even though he may be laughing all the way to the bank at the moment, which just might indicate he is pretty good at sums!!

    Remember the hundreds of “economists” predictions reference the UK economy post June 2016? So, today, the Footsie blasts through 7500, and George is producing a wrapper for my fish supper.

    Of course Robin Hood will change all this, except he may find the sheriffs in New York, Hong Kong etc. are somewhat unaccommodating, and he doesn’t manage to achieve even the cost of a fish supper, and the merry men are spending their £billions of bonus in other parts of the globe. Maid Diane will soothe his brow and confirm, by her calculations, it was a really good idea.

  4. Yes, John hilarious! How many sites have been developed since Preese Hall WITHOUT any difficulty at all?? That is called experience, and that produces information for the operators. I will not point you in the direction, but I certainly have followed one situation where utilisation of that experience and the development that has taken place, achieved an absolutely flawless new frack in a totally new environment to fracking. Didn’t even see any reports of muddy tyres.
    Scaremongering has worked well for you so far, which is understandable. It will be interesting in the near future to see what else you have in the locker when that is redundant. Economics? Now, that is hilarious! I’m sure there are loads of economists looking for the work, but their reputation is not going to add much value and they would be battling against actual costs and returns. Cheaper just to revert to Giggle.

    • The events at Preese Hall are clear. A small amount of fracking caused 50 seismic events. One event was 2.3 magnitude and was felt over a large area.

      Events that size will never be accepted by homeowners.

      When Cuadrilla were finally proven to have caused the quakes what do they ask for? A future threshold of 2.6 magnitude, higher than the 2.3 magnitude that shut them down in the first place. A 1 magnitude rise is felt 10 times as strong.

      It is glaringly obvious that their results from Preese Hall show that in order to produce gas from the Bowland shale deposits you need to have a high magnitude threshold.

      No seismic activity, no gas.

      The temporary 0.5 magnitude threshold is for ‘the next few operations’ and can be ‘adjusted over time’

      Voters across all political parties will not tolerate regular high magnitude events.

      People pay a premium to live in the countryside. They will protect their assets.

      The cumulative effect of multiple fracks and seismic events can not be predicted but investors, banking institutions, mortgage lenders and house buyers will have some serious decisions to make.

  5. Fiction John. I have lived in the countryside all my life. You have the same protection under the law and planning regulations as anyone else. If you don’t like the smell of manure being spread try to stop that because you have paid a premium. If you don’t like the stables owned by people who don’t live in the community and find it cheaper to burn the manure 24/7 rather than have it hauled away try protecting your assets. The environment enforcement will be absent.

    As Paul questioned. What is the problem then with PNR? This, according to you, will prove your point and stop the development in the UK. So, why the desperation to try and stop that happening? Unfortunately for you, the wider public has become aware and switched on to fake news, especially when they see others for your cause pontificating about thousands of wells marching across the countryside. Incoherent messages seem to be popular, but they are not taken seriously.

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