Market Report: Scottish Government halts Algy Cluff’s energy revolution

Algy Cluff’s energy revolution in Scotland has ground to a halt after the Scottish Government imposed a moratorium on underground coal gasification on top of its ban on fracking.

One of the original North Sea oil pioneers, Mr Cluff now runs AIM-listed Cluff Natural Resources, which is betting that dwindling offshore reserves will force the Government to turn to UCG, as it’s known in the industry.

The company, which hopes to extract gas from coal seams in estuaries across the UK, paused work in August on its flagship Kincardine project under the Firth of Forth, a short sail along from the Forth Road Bridge, pending clarification of the SNP’s stance on the energy source.

It had hoped to install Britain’s first UCG plant there but work will now be on hold until the outcome of a lengthy review, which will not be made clear until spring 2017 at the earliest.

Cluff Natural, three of whose nine UCG licences are in Scotland, said it would now turn to developing its conventional gas blocks in the North Sea instead. The shares sank 0.25p or 6.5 per cent to 3.63p.

The FTSE 100 continued its winning streak to seven days, up 38.47 points to 6,374.82, but a string of central bank announcements throughout the day meant gains were limited, especially ahead of the release of the Federal Reserve’s minutes from September when policymakers opted not to raise US interest rates.

A rise in Air France’s latest passenger numbers lifted British Airways owner IAG by 5.5p to 559p and easyJet by 32p to 1,704p, while miners including BHP Billiton, up 37p to 1,145p, and Anglo American, 13p better off at 677.5p, played their part in the blue-chip index’s rise.

Bargain-hunters sniffed out shares in Shire, 43p healthier at 4,372p, in the wake of the drugmaker’s recent falls – which are likely to mean it will have to raise its offer significantly for Baxalta to stand any chance of buying the US firm.

Elsewhere, Hays was the mid-cap index’s biggest casualty, down 10.8p to 136.7p, as the recruiter warned adverse currency movements in the first quarter would hit annual profits to the tune of £10m.