UCG Terminates Agreement to Sell OPIS
The agreement reached two months ago that had UCG selling its wholly-owned subsidiary, Oil Price Information Service, LLC (OPIS), to Platts, a division of the McGraw-Hill Companies, is no more. UCG announced on Sunday that it has decided to hold onto OPIS, a leading provider of news, pricing and software for buyers and sellers of petroleum products.
“Last year we entered into a strategic review of our business to sort out the best options for OPIS to grow going forward,” OPIS CEO Brian Crotty wrote to us in an email. “That process took many months and resulted in the sale agreement with Platts—and ultimately us terminating that agreement.”
The change of heart appears to have taken place due to a negative reaction from OPIS’s customers, who feared that new owners would mean new directions. “We talk to our customers all the time as part of our business,” Crotty wrote. “They were concerned that the OPIS brand—and all that stands for—would change.”
Crotty, a SIPA board member, has worked in energy publishing for24 years, first with UCG from 1986-93 before moving to Phillips – Hart Energy for eight years. He came back to UCG in 2002 to run OPIS. It was only on Dec. 8 that the deal was first announced. Crotty was asked yesterday if an experience like this confirms the close relationship that SIPA members have with their customers/subscribers.
“The strategic process we went through that resulted in the sale agreement with Platts—and ultimately us terminating that agreement—confirmed and even amplified for us the high regard customers have for our data, our methodologies, our software products, our news, our analysis and the people at OPIS who create and support our products and services,” Crotty replied. “The process also revealed to us numerous opportunities to enhance existing products and services and create new ones for our customers. Going forward we will be focused on doing just that.”
Reuters reported that a Platts spokeswoman said the company has been notified by OPIS of the termination. “Platts will continue to pursue a variety of other paths to broaden its presence and expand its product offerings to the global energy industry,” spokeswoman Kathleen Tanzy said in an email to Reuters.
Reuters also confirmed that OPIS is now off the market. As for what comes next, Crotty wrote that “we will take what we learned about our business during the sale process and use that to improve our external products and internal systems. It is an exciting time for us, as we emerge from this process smarter and more focused.”
Founded in 1977, OPIS is a leader in petroleum, natural gas liquids, refinery feedstock and biofuels news and pricing. It is the only information provider that links spot, rack and retail gasoline and diesel prices throughout the U.S. supply chain. OPIS maintains a huge database of historical spot, rack and retail prices and delivers the majority of its news and pricing information to customers electronically.
Platts, a rival of OPIS, provides energy and other commodity prices and news. It will be interesting to see how they proceed from here. Larry Neal, president of Platts, sounded very enthusiastic at the time of the sale announcement. SIPAlert Daily will continue to monitor the situation for you.
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