Germany and France in nuclear talks
Framatome of France and Siemens of Germany are discussing combining their nuclear activities. If talks are successful it could lead to the formation of a joint venture, 66 per cent owned by Framatome and 34 per cent owned by Siemens.
The deal, however, is unlikely to be completed until.restructuring of the French nuclear sector is completed probably at the end of this year.
The restructuring would see Cogema, the French nuclear fuel reprocessing company, take a 34 per cent stake n Framatome. The French government has also given Alcatel, the telecommunications equipment group, the green light to shed its 44 per cent stake in Framatome.
The restructuring plan was announced in July this year, at which time France indicated that it could lead to a partnership between Framatome and another European company. Siemens, which has been working with Framatome on the development of the EPR pressurized water reactor has long been seen as the most likely partner.
Framatome, while confirming that there was a possibility, of a joint venture between the companies, stressed that talks were a long way from any conclusion.
ABB Alstom Power considers job cuts
A confidential document apparently leaked to a French newspaper, has said the loss of about 1900 jobs in ABB Alstom Power’s steam turbine division, is one of a number of possible scenarios in the company’s restructuring. A company spokesman commented that no decision had been taken on any of the options.
The company’s steam turbine division employs 4658 and the document says the workforce would be cut by 41 per cent to 2742. According to the document, ABB Alstom Power operations in France, England, Germany, Italy and Sweden would all be targetted for job cuts. The head count in Switzerland, however, was expected rise slightly.
Such a move could help the company retain its competitiveness in the steam turbine sector which has been plagued by world-over capacity and stagnation of demand. The collapse of orders for nuclear power stations for example has led to the elimination of the associated steam turbine market.
The company was formed this year by the merger of ABB and Alstom’s generation businesses.
GE to invest in Belfort
General Electric which recently acquired Alstom’s gas turbine business, including its plant at Belfort for $910m, is to invest in Belfort and transfer part of its world market turbines production to the French.
GE said it is keen to strengthen its position in Europe and will make Belfort its centre for gas turbines of 40-150 MW.
Didier Forget, GE’s direct general responsible for European stations, said some of the production lines currently in operation in Greenville, South Caroline, USA. Production capacity at the Belfort site is to be increased by 30 per cent.
NEG Micon rescue package
Details of a rescue DKr1.2bn ($172m) package to save troubled wind energy company, NEG Micon were announced, which would save the company from bankruptcy.
The company’s five largest shareholders, which include Denmark’s biggest pension funds, agreed to intervene with a loan of DKr500m. An additional DKr700m will be secured by means of a rights offering this year. NEG Micon said it expected a “moderate positive result for 2000” as a result of the rescue package.
The company admitted it had expanded too rapidly with a number of acquisitions in the Netherlands and the UK in the past 12 months. Its woes were compounded by problems in turbines fitted with Flender gearboxes.
NEG Micon, the world’s largest maker of wind turbines in terms of global installed capacity, revealed a half-year result in August which was far worse expected. Consequently, the managing director, Jens-Erik Kristensen resigned from the company. News of the rescue package saw share prices close 40 per cent higher.
Brazil’s Petrobras eyes electricity market
Brazilian state-owned oil giant, Petrobras, plans to invest $32.9bn over the next five years in an effort to transform itself into an important multinational corporation.
Under the plan, Petrobras will no longer be exclusively dedicated to oil and gas but will also look at projects in power generation.
Some 14 per cent of the investments over the next five years will be outside of Brazil in countries such as Colombia, Bolivia, Ecuador, Mexico, Argentina, Venezuela and Cuba.
Eneco/Shell trading venture:
Dutch electricity distributor Eneco NV and Shell Energy, a unit of Royal Dutch Shell Group (RD), plan to form a joint venture to purchase, trade and sell electricity in the Benelux. The 50:50 joint venture, to be called Eneco Shell Energy Partnership VOF, will focus on industrial energy purchases.
Enron Corp. reported a 73 per cent rise in third-quarter net income. The company also said it may be interested in selling its Portland General units, just three years after it acquired the Portland-based utility for $2.1bn. Meanwhile, Enron recently launched EnronOnline, a global internet-based transaction system for wholesale energy and other commodities.
Japanese to buy US stakes:
Toyko Electric Power Company (Tepco) and Mitsubishi Corp. intend to buy stakes worth $200m in US IPP company, Orion Power Holdings Inc. This would make Tepco the first Japanese utility to invest in a US power company. The combined stakes would be worth about 30 per cent.
Reliant opens Dutch trading:
US-based energy services company, Reliant Energy has opened a new trading and marketing subsidiary in the Netherlands. The company’s initial efforts will focus on industrial and commercial customers who are free to choose their electricity supplier.
RWE considers UK:
RWE the German utility has been in contact with the German cartel office to assess the regulator’s view on industry mergers – including the UK. The utility denied speculation it was considering a $12.4bn bid for National Power.
Toshiba and Vamec tie-up:
Toshiba do Brasil and VA Tech Vamec Hidro Energética (a joint venture between Austrian firm VA Technologie AG and Brazilian steel mill Usiminas) have sealed an agreement to form a company which will compete in the local market for small and medium sized hydro equipment.
Scottish Power and Pacificorp have received approval for their merger from the Washington Utilities and Transportation Commission (WUTC). It is the fourth of the six states needed to approve the merger. Meanwhile, Scottish Power said it plans to sell its electrical contracting and technology business.
Utilicorp in Scandinavia:
US company Aquila Energy, a subsidiary of US utility, Utilicorp United, is to establish a presence in Scandinavia to offer energy related and risk management services to industrial and energy groups in Finland, Norway and Sweden.