Consciousness of Sheep
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Just months Cuadrilla’s CEO Francis Egan raised questions about the profitability of UK fracking; he has taken an axe to the company’s finances. According to Jillian Ambrose in the Telegraph:
“Cuadrilla has cut deep into its spending and reduced its workforce by a fifth to stem its mounting losses…
“The company’s latest financial result shows it managed to narrow losses to $11.54m last year from $17.7m in 2015 by cutting $5.5m from its operating and administrative expenses, which include staffing and overheads and the costs of the planning process, to $11.7m last year.
“The efforts include reducing the number of directors from three to two and cutting the overall headcount by a fifth to 23 Lancashire-based staff.”
Although the company blames anti-fracking campaigners for delaying UK fracking projects like the one at Preston New Road in Lancashire, the cuts are more likely to reflect the warnings from a range of experts that UK fracking is unlikely to ever turn a profit. Indeed, almost all of the money to be made from UK fracking is from ownership of the exploration licenses – which can be used to secure financial investment – rather than ownership of any recoverable gas that may happen to exist beneath them.
UK fracking companies like Cuadrilla face even more uncertainty after Theresa May’s snap general election resulted in the government losing its majority. Had the Tories been returned with a large majority they were expected to enact legislation to prevent further objections and protest from standing in the way of the fracking industry. However, a minority government concerned to shore up its votes is unlikely to ride roughshod over constituencies that it may rely on in the anticipated follow-up election later this year; effectively leaving the fracking industry in limbo.
