Barclays suggested this morning that it had not sold Third Energy because fracking at the company’s gas site at Kirby Misperton site in North Yorkshire had been delayed by the government.
The bank said at last year’s AGM the rundown of its non-core assets, including Third Energy, was being accelerated and that closure was less than two months away.
But since then, Barclays has increased its loan to the company by £2.9m.
At this year’s AGM this morning in central London, Barclays Chairman, John McFarlane, told investors:
“We want to get rid of this and to divest this asset”.
Asked why Barclays had increased the loan to £15.4m, Mr McFarlane said:
“Yes. We admit that we made this investment. It’s been sitting in non-core and you’re absolutely correct we want to get rid of this and to divest this asset.
“However, there has been most significant government delays with respect to this project and therefore what we had hoped at this particular moment in time has not yet occurred.”
Asked “Do you mean the fracking?”, Mr McFarlane replied “Yes”.
Financial resilience test
The government announced in January 2018 that it was delaying a decision on final consent for fracking at the KM8 well in Kirby Misperton until Third Energy submitted its overdue accounts. The Business Secretary, Greg Clark (left), also ordered an assessment of the company’s financial resilience.
The accounts were released on 2 February 2018, showing a £3.4m loss. Parliamentary questions on when the financial resilience assessment would be completed have been met with the answer:
“There no set timeframe for the Department [of Business, Energy and Industrial Strategy] to provide its response to the Oil and Gas Authority in this instance.”
Also in February, Third Energy began releasing equipment from the KM8 site and in March, the company said the fracking would be delayed until the autumn because it wanted to avoid the harvest and holiday seasons when the roads were busiest.
“We have plans in place”
This morning, Mr McFarlane was asked if he had hoped the fracking would happen. He replied:
“No. We are hoping to divest this company at the appropriate time and, unfortunately, we have not been able to do that at this point in time. We are looking forward to doing it as soon as possible. We do have plans in place and we do have relationships with advisors to move this asset on and we will do it as quickly as we can.”
The questions, asked by Leigh Coghill, an anti-fracking campaigner, on behalf of a Barclays shareholder, continued:
“Is there any chance you would divest before the fracking takes place?”
Mr McFarlane replied:
“I can’t comment on the individual circumstances here because it’s got privacy aspects to it. All I can tell you is that we do not want to own this asset.”
At the AGM, Barclays came under pressure to cut investment in other fossil fuel projects, including pipelines. While it was questioned on climate change issues, a group of student protesters moved to the front of the conference hall and onto the stage. They were removed by security staff.
Barclays has been the subject of an ongoing anti-fracking campaign. In October 2017, Friends of the Earth estimated that 7,000 people supported its ongoing action against the bank.