* Disclosure requirement to take effect around middle 2012
* Oilfield outages will not be covered
By Barbara Lewis and Vera Eckert
BRUSSELS/FRANKFURT, Nov 18 Energy
companies will have to disclose the timing of gas field
maintenance and nuclear shut-downs under new EU legislation
about to be finalised and expected to start taking effect around
the end of this year.
The law will not cover highly market-sensitive information
on outages on oilfields, long a source of controversy among oil
traders, although knowledge of when associated gas is shut down
could provide a clue.
"Nuclear shutdowns and gas field maintenance would typically
trigger a disclosure obligation," said Lucas Bergkamp, a partner
at Hunton & Williams in Brussels.
Another international law firm, Cleary Gottlieb, issued a
note saying "inside information" would include anything linked
to "the capacity and use of facilities for production, storage,
consumption or transmission of electricity or natural gas and
use of LNG facilities".
That would include planned or unplanned disruptions.
"REMIT (Regulation on Energy Market Integrity and
Transparency) is a first step in the extension of traditional
prohibitions of insider trading and market manipulation to
physical commodities market," the note concluded.
Commission officials said they were working on the precise
details of which data the energy firms would have to publish.
The data will have to be published six months after the
first stage of the law is enforced.
The first step, making insider trading and market
manipulation illegal, will be binding 20 days after publication
in the EU Official Journal, expected over the coming weeks. The
draft rules have already been widely publicised.
For the British wholesale power and gas markets, utility EDF
has started publishing a nuclear outage table, but
information on some other plants and on gas field maintenance
can be hard to obtain.
"The issue (for traders) is that everyone wants to know what
the other one is doing, but no one wants to reveal their
information. Regulation is a way to enforce this, so people
won't have the choice," said a gas trader at a major European
utility, who asked not to be identified.
He also raised one of the standard objections to new EU law.
"Enforcing these rules on companies will cost quite a lot.
Updating their systems, etc. requires quite a lot of work," he
Traders and energy companies in Germany took the view it
would change little for a market regarded as a model of
transparency and that the same rules should be applied
RWE Supply and Trading and E.ON Ruhrgas
reveal on their websites production and outages in real time.
The EEX (European Energy Exchange) also has live information
on installed capacity.
"E.ON supports regulatory plans which serve to strengthen
trust in energy markets, for example transparency guidelines, if
they apply to the whole of Europe uniformly," an E.ON spokesman
"Transparency is being handled very differently in different
parts of Europe at the moment."
Commission officials said oil had been deliberately excluded
from the regime, as it is regarded as more international than
Europe's wholesale power and gas markets.
"Oil is an international commodity. Enforcing transparency
rules needs to be tackled at international, not European level,"
an official said.
"Whereas gas and electricity are fundamentally European
markets, as they need to be delivered by a network."
Regulating the oil futures market, where the bulk of
international oil trade takes place, has fallen to the Commodity
Futures Trading Commission (CFTC) in the United States, as well
as the British regulator, the Financial Services Authority, and
But the publication of supply outages that can have a big
impact on physical oil markets, with knock-on implications for
futures trade, has yet to be covered.
Major oil companies say they have internal barriers designed
to prevent their trading departments benefiting from the
knowledge of field operators about when oil supplies fluctuate
because of outages.
BP and Royal Dutch Shell had no immediate
comment on REMIT.