Aggreko price review sought by customers in shale fields

TEMPORARY power supplier Aggreko has told investors its shale customers in the United States have started asking it to review prices.

Chief financial officer Carole Cran told the company’s annual general meeting the company gets about 80 per cent of its revenues from the production area in that industry, which has helped to mitigate the impact of oil price fluctuations.

Ms Cran confirmed the impact of cuts in exploration spending along with lower prices was “not entirely straight forward” for the company. She said: “We are being asked by customers if we can look at our pricing.”

Ms Cran indicated Aggreko was looking closely at the matter and went on to suggest ongoing low oil prices should help to stimulate demand in alternative sectors.

Chief executive Chris Weston said the issue of price reductions is mainly confined to the US at the moment. He said: “We operate in 30 countries around the world in oil and gas alone. We are seeing the biggest level of inquiry in shale, which is not surprising as that is at the nexus of where the oil price fall and discussion is focused.”

Mr Weston described the oil price situation as “fluid” but said Aggreko was able to create “mini power stations” for its shale customers that can run off of the flare gas created during the fracking process. He said: “We have some really good solutions for our customers that can help them reduce their costs.”

Mr Weston told shareholders at the AGM in Glasgow’s Grand Central Hotel he had been hugely impressed with Aggreko’s staff and products during his first few months in charge.

All resolutions put forward at the meeting were passed.