LOCAL Tories have again raised concerns over Warrington Borough Council finances saying a £10m investment in a Texan oil company looks set to become a “complete disaster” for the town.
Despite declaring a Climate Emergency in 2019, local Tories say it has now come to light that, in 2020, the council made a “poor decision” to invest £10m in the Texan oil company called Technology Enhanced Oil (TEO)*, which claimed to be able to use new cutting-edge technology to extract more oil and gas than its competitors.
TEO submitted its 2022 Annual Report to Companies House on 23 June 2024. This described a drop in production of 18% and a loss before tax of $11.5m on revenue of $8.4m.
Significantly, TEO company bonds, including those owned by WBC, have now been converted into ordinary shares meaning that WBC will no longer receive any interest on its £10m stake.
In a description of events subsequent to 2022, TEO says “Facing the low if not negative return of the responsible operations of conventional wells […] the Group decided to pivot its activity to provide services only and is seeking to dispose of its oil & gas properties. Such process is expected to be completed during 2024.”
Warrington Conservative Federation’s Finance Spokesperson, Ken Critchley, said: “The decision to invest in this company is another blow to the financial credibility of Treasury Management at our Labour-led Warrington Borough Council.”
“In 2020 the Council invested £10m of Warrington residents’ cash in a start-up oil company, with a complicated financial structure employing “cutting edge” technologies, based in Texas USA. Labour Councillors should have asked Council Officers “what could possibly go wrong?” –we are only now beginning to find this out.”
“The obvious questions for Warrington’s Labour leadership are: Why was an investment made in this company? Has all of the £10m of Warrington’s money now been lost or just nearly all of it? and, How did this investment respect the Statutory Guidance for local authorities?”
“This latest revelation of another WBC Treasury investment in difficulty follows recent revelations in the press regarding: the loss of the Moody’s credit rating; the Altana “Junk Bond” investment debacle; the Mailbox investment breaching its banking covenants; the default of the Abundance for Liverpool bond; and the extensive links between the Council’s investment activities and a Monaco-based financier.”
Local Conservative Party Member Nigel Balding commented: “This is another shocking blow for residents who are following the news concerning WBC Finances. It’s another example of how Labour councillors are asleep at the wheel whilst WBC gambles on anything it likes with our money, and it’s another concern for us about WBC playing fast and loose with the financial rules.”
In response, a Warrington Borough Council spokesperson said: “All our Treasury investments are made in line with the council’s constitution and in line with Local Government best practice.”
* Note: the Texan Oil company is now called Technology Enhanced Operations (TEO).
1 Comment
No suprise with this incompetent labour council we have they just don’t think.
The residents of the town will be in debt for 50 years or more with this lot