A Chinese investment fund controlled by the Communist Party in Beijing has extracted almost £650 million in dividends from one of the North Sea’s largest gas producers, The Mail on Sunday can reveal.
The bumper payout to China Investment Corporation (CIC) on its stake in Neptune Energy is believed to be the controversial £1trillion sovereign wealth fund’s biggest ever return on a UK investment.
The vast sums are being paid into Beijing’s coffers as international concerns mount over China’s human rights record and tensions over Taiwan. The news also comes as the boss of CIC, Hu Hao, mysteriously quit last week after just two years in charge.
High stakes: The payout to China Investment Corporation on its stake in Neptune Energy is believed to be the sovereign wealth fund’s biggest ever return on a UK investment
Neptune provides about 12 per cent of the UK’s gas. It was founded in 2015 by Sam Laidlaw, a former boss of British Gas owner Centrica, with the backing of private equity firms Carlyle and CVC. They have also shared in the multi-million pound payouts, while ordinary British families struggle to cope with spiralling energy costs.
Watchdog Ofgem is expected to confirm this week that the cap on household gas and electricity bills will be lifted from £1,971 to around £3,600 in October.
Analysts warn it could top an eyewatering £4,000 in January. The Government is mulling a new windfall tax on power giants to shield customers from rocketing bills.
Laidlaw has attacked the windfall tax, which subjects oil and gas producers to a 25 per cent levy on their energy profits and is expected to raise around £5billion.
The Chinese fund acquired its 49 per cent stake in Neptune in 2018 and three of its officials sit on the UK firm’s seven-strong board. In total, CIC has netted £645million in dividends in the past four years. Last year alone, shareholders received £833million, with CIC getting almost half.
As well as its holding in North Sea gas, the fund has an 8.6 per cent stake in Thames Water. It has received tens of millions of pounds in dividends from Thames.
The Chinese began to move in on UK firms in 2012, but the mood towards their involvement in key infrastructure and natural resources has soured. Many experts believe North Sea oil and gas are key to the UK’s energy security.
Neptune said for every pound paid to shareholders last year, £1.30 was invested in new projects and existing assets. It has yet to declare a dividend for 2022, but with firstquarter profits up sixfold on higher gas prices, the Chinese are in line for another massive windfall.
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