Exxon Urges U.K. to Keep Open Gas Market as EU Trading Expands

March 03, 2010, 1:24 PM EST

By Ben Farey

March 3 (Bloomberg) -- Exxon Mobil Corp., the largest U.S. energy company, said European natural-gas spot markets are growing and lawmakers in Britain and elsewhere shouldn’t make changes that threaten their progress.

“We’re seeing continued evolution to more trading at hubs on the Continent,” Richard Guerrant, Exxon’s director of Europe, Russia and the Caspian, said in an interview in Amsterdam yesterday. “All the reforms we’ve put in place over many years in Europe are starting to have an impact.”

U.K. energy regulator Ofgem last month put forward measures to protect energy supplies after the recession curbed funds for utilities to invest in new capacity. The proposals include a minimum carbon price, capacity tenders for all forms of power generation and a centralized market for some energy trades.

Any U.K. plan to set up a central energy buyer to secure gas supplies “wouldn’t be our preference,” Guerrant said, adding that Exxon favors the “current structure.”

Britain needs to ensure it has sufficient energy supplies as it prepares to shut as much as 30 percent of its power- station capacity within the next decade. Aging plants will be replaced in part by generators running on gas, a fuel that’s increasingly bought from abroad as North Sea reserves decline.

“We want to make sure we maintain a more open market, a free market,” Guerrant said.

Trading at French and German gas hubs is also increasing, the executive said. “The consolidation of those market areas has all been positive for liquidity,” he said.

Source: http://www.businessweek.com/news/2010-03-03/exxon-urges-u-k-to-keep-open-gas-market-as-eu-trading-expands.html