BP Share News (BP.)

BP has opened secret talks with Russia's state-owned energy giant Gazprom to help build a pipeline to bring vast quantities of gas into Britain by 2016. David Peattie, BP's director for Russia, said talks were at 'an early stage' but Financial Mail understands that David Cameron has given the thumbs-up to a deal. The Prime Minister discussed the plan with President Vladimir Putin when they met at the Olympics. Peattie said a deal could be signed as early as the middle of next year. The contract will follow BP's recent deal to take a 20% stake in Russia's Rosneft. A re-evaluation of its exploitable reserves is under way and is expected to lead to shares of both companies being re-rated by the stock market. Sources close to the negotiations predict that the 600-mile pipeline extension could be completed in about two years.The new Thomas Cook chief executive, Harriet Green, is to issue a warning that further costs need to be stripped from the ailing business as it prepares to unveil a second year of losses. Ms Green, who was parachuted in to the 171-year-old holiday company in July from electronics group Premier Farnell, will give investors the first taste of her recovery strategy as she spells out three key areas of focus on Wednesday. Senior and middle management are expected to bear the brunt of the latest restructuring, while analysts believe the company could decide next year to shed further high street travel agents and some back- office operations. Thomas Cook is part way through a two-year programme to shut 200 of its high street travel agencies. Cost-cutting, technology and customer services will be the three main pillars of Ms Green's first strategy presentation, according to The Sunday Telegraph.Royal Bank of Scotland has sent sales documents to a second batch of prospective buyers of 316 branches as it attempts to finalise a shortlist next month. Information was dispatched this week to trade buyers Nationwide and Virgin Money, private equity player JC Flowers and another suitor, thought to be the venture capital firm led by former UK trade minister Lord Davies of Abersoch. RBS was ordered to sell the branches by European regulators as a condition of receiving a £45bn bailout in 2008 which left it 82% taxpayer owned. It was forced to restart the sale process after Spain's Santander pulled out of a deal last month. RBS has caught the eye of Corsair Capital, a venture capital fund aiming at the financial services sector where Davies is vice-chairman. Two further venture capital firms, Blackstone and Anacap, the backers of new bank Aldermore, have also signalled an interest. RBS intends to have a firm shortlist of possible buyers in place by the middle of December as it "accelerates" the sales process ahead of a 2014 EU deadline, sources said, The Scotsman on Sunday explains. In a special report on Mexico within its latest weekly edition The Economist calls attention to how the country's President-elect, Enrique Peña Nieto, has promised an energy reform early in 2013. The reforms are expected to move Mexico closer to opening its petrochemical sector to greater competition and foreign investment. In that regard, the magazine highlights comments by the head of the state-run oil giant PEMEX, Juan Jose Suarez Coppel, to the effect that the firm is "horribly run," as successive governments milked the company rather than allow it to invest in exploration and technology. That explains why between 2006 and 2011 Brazil drilled 101 deep-water oil wells, far outstripping Mexico´s 18. Unfortunately, as a result not only did Mexico´s oil production decline, but -almost as bad- fields are often allowed to go into "decline." On a more positive note, oil production is expected to rise in 2013 for the first time in eight years. They were the decades that gave us Gordon Gekko and the Big Bang. The 1980s and 1990s were boom years for stock market investor, with globalization, deregulation and rising productivity apparently driving often double-digit market returns. Yet, just as the financial crisis has unraveled assumptions about free market economics, an FT Money analysis purports to show that perhaps the most significant driver of those equity returns was something else entirely: demography. The 1982-1999 bull market was driven by the postwar baby boom, which resulted in a bulge in the numbers of working-age adults and the core savings group. That has ominous implications. Faced with current trends in birth rates and life expectancy, a growing body of economic research suggests that the rates of stock market growth enjoyed by investors in those decades are gone for at least a generation - and possibly forever, the newspaper adds. Malaysia Airports Holdings has entered the running for Stansted airport, as the owners of London's third hub attempt to stoke up competition in the £1bn bidding process. The Sunday Telegraph understands that an approach has been made by the group, which owns 39 airports in its domestic heartland, including its flagship Kuala Lumpur International Airport. It is known that Stansted's owner, Heathrow ? the airports group formerly known as BAA ? has sought out new bidders in an attempt to boost the likely price. Although there were four existing bidders for Stansted in the first round, Heathrow has been seeking a "stalking horse" suitor to revive the auction process. The original four are Manchester Airport Group (MAG) which is backed by Australia's Industry Funds Management, plus financial investors TPG, Macquarie and HRL Morrison. Energy reforms to be unveiled this week by the Government could cost consumers even more than expected and may even jeopardise the credit ratings of major suppliers, Ian Marchant, the chief executive of SSE, has warned. The long-awaited Energy Bill, intended to encourage £110bn of investment in new power plants this decade, will offer companies long-term contracts guaranteeing a price for electricity from new nuclear reactors and wind farms. But Mr Marchant said the costs were likely to be even higher because of increased risks for suppliers who have to manage the collection of volatile subsidy payments. Household energy suppliers cannot adjust consumer bills every month and would instead have to manage the variation on their own balance sheets, The Sunday Telegraph explains. Ed Davey, the Liberal Democrat energy secretary, has taken legal advice to have his Conservative deputy stripped of his responsibilities for green energy policy in an increasingly bitter coalition battle over wind farms. Davey appealed to David Cameron over comments made by John Hayes, the energy minister, who is a firm opponent of onshore wind power. The fallout comes as Britain's onshore wind-farm industry is under threat from councils using new planning rules to block the construction of thousands of turbines. Earlier this month Hayes insisted no more wind farms beyond those already planned would be built. "Job done ... end of story," he said. Last night it emerged that after the prime minister failed to take action Davey consulted lawyers in an attempt to have Hayes stripped of his responsibility for green energy policy. He argued that Hayes's continued presence in the job risked leaving the department's decisions vulnerable to judicial review at a time when the government was trying to create "certainty" for energy investors, The Sunday Times says. A heavyweight line-up of suitors is battling to take over Sutton and East Surrey Water. CVC, the buyout firm, and Sumitomo, the Japanese trading house, are understood to be among the final bidders for the water business. Icon Infrastructure, an investment fund spun out of Deutsche Bank, has owned the water company since 2005. It appointed Citi, the investment bank, to "explore options" last month. Sutton and East Surrey Water is expected to fetch between £250m and £300m. It reported a pre-tax profit of £4.5m for the year ended March 31, on turnover of £57.1m. The company employs 250 and supplies about 650,000 consumers in 278,000 homes, The Sunday Times reports. The private-equity owner of Formula One and Legoland Parks, CVC Capital Partners, has started talks with potential investors for an $11bn (£8.9bn) buyout fund, one of the biggest since the financial crisis started. CVC, which in 1990 was spun-out of a Citicorp vehicle that propelled the careers of City bigwigs John Botts and Jon Moulton, is said to have started "soft marketing" for the long-touted fund. This is when buyout barons talk to investors about the potential shape, size and returns of a fund ahead of formally asking for the cash. A structured process is expected to start in the New Year, in what private-equity insiders believe is a crucial test of an industry that has been badly hit by both the financial crisis and a regulatory clampdown by the European Union. CVC's last fund in 2008 raised about $10.8bn, short of its $12.1bn target, but the firm's co-founders hope to raise marginally more this time, says The Independent on Sunday.AB