Williams pulls plug in London

THE London energy trading unit of Oklahoma-based Williams is to close on 12 September with the loss of about 70 jobs. The unit lost $497m (£323m) in the second quarter following the collapse of US energy giant Enron.

European firms, many burned by Enron's demise, have refused to enter into long-term risk management contracts with Williams and other US energy traders since their debts were downgraded. Some, including Williams, have been looking for partners with little success and there have been reports that BP chief executive Lord Browne has rejected several such overtures in recent weeks.

'Turmoil in the energy trading sector has impacted our ability to trade and compete for new structured energy transactions,' said Tim Loposer, Williams' president of European Energy Marketing & Trading. 'But Williams will meet and honour all its contractual obligations.'

Its withdrawal follows a decision by rival Aquila to pull out of wholesale energy marketing and trading and to liquidate most of its remaining trading positions to lift its credit rating.

Dynergy, El Paso, Reliant, Williams, CMS Energy and Duke Energy are all under scrutiny for 'round-trip' trades - deals struck at the same price with the same counterparty to increase revenue and volumes artificially.

Aquila has about 175 people in Europe, mostly in London. It has been disposing of assets and is seeking a buyer for Midlands Electricity, which it acquired earlier this year. 'It is part of our programme to improve our credit standing and demonstrate considerable progress toward maintaining a strong investment grade credit rating profile,' a spokesman said.

There are now only two significant US players left in the wholesale trading business in Europe - TXU, with operations based in Geneva, and American Electric Power, headquartered in London.