Energy

Saudi nuclear ambitions may further fray U.S. ties

14 January 2020

Riyadh could soon award tenders to build two nuclear reactors. Picking Russia’s Rosatom would heighten tensions with Washington, its traditional ally. And if the kingdom also lobbies for scope to create nuclear weapons, it would make for an awkward comparison with archfoe Iran.

Siemens CEO’s climate blog sends semi-woke signal

13 January 2020

Joe Kaeser has admitted the 98 bln euro German engineer should not be working on Australia’s Adani coal mine, but cannot pull out. Creating a panel to vet deals for their greenness, and possibly nix them, is partial penance. The CEO’s public disapproval may be a better deterrent.

London’s new year IPO will buck sad 2019 trend

9 January 2020

KKR is looking to list one-quarter of its UK smart-meter group, Calisen. Last year the volume of London listings dipped as new offers were pulled and existing ones lurched. The strategic tailwinds behind Calisen’s sector should stop it being added to the pile of duds.

Guest view: How to cut the ESG disclosure overload

7 January 2020

The data Fortune 500 companies provide on environmental, social and governance risks can be overwhelming, hard to compare and lacking much financial use. Geoffrey Heal and Shiva Rajgopal of the Columbia Business School lay out a plan to clean up the informational morass.

An ever-drier world will unleash investment flood

6 January 2020

By 2030 humans will be using 56% more water than is sustainable, a new report shows. Closing the gap may cost $1 trln a year. But companies and investors are showing more interest in preventing a global water crisis. That bodes well for finding solutions – and making a profit.

Aramco’s war-risk snake trumps oil-price ladder

6 January 2020

The threat of U.S. sanctions on Iraq should boost the oil price, and the Saudi giant’s value. Yet its shares have slumped to their lowest level since trading commenced last month. That may be because the company’s operations are more likely to be a target for Iranian retaliation.

Viewsroom: Jack Dorsey’s heroic year ahead

19 December 2019

From banning political ads to developing cryptocurrency plans, the CEO of Twitter and Square has been politically more astute than rivals like Facebook. That sets him up for a good 2020. Also: the different ways that shareholders, the Fed and M&A bankers will tackle climate risk.

M&A bankers will turn climate risk into clients

19 December 2019

The financial impact of global warming is one of the biggest strategic issues CEOs face, yet it plays a small role in dealmaking. That might change in 2020 as shifting regulation and consumer habits start to affect the bottom line, giving climate-conscious advisers an edge.

Green laggards face war on multiple fronts

18 December 2019

Businesses slow to react to the impact of climate change have so far got off lightly. In 2020, investors will broaden their activism and target passive funds, too. Meanwhile, some governments may impose stricter measures, and more valuation clarity will wake up short sellers.

Aramco’s next stop will be bond, not stock, market

18 December 2019

Despite raising $25.6 bln from listing 1.5% of Saudi Aramco, Riyadh will want to flog more. But even if it can find a friendly foreign wealth fund, Saudi might still have to cut the price. An easier path would be to load Aramco up with debt and pay itself a fat special dividend.

Guest view: Cities are $24 trln green opportunity

17 December 2019

Metropolises account for 70% of global carbon emissions. That puts them at the forefront of the battle to keep global warming to a minimum, argues Christiana Figueres, the former UN climate chief behind the 2015 Paris accords. But cities cannot do it alone.

Goldman shows world leaders live in wrong climate

16 December 2019

The Wall Street firm is targeting $750 bln of sustainable finance over the next decade, even as politicians dither. It’s a fluffy goal. Yet it shows the hard-nosed Goldman sees money to be made from sustainable investment. Its long-term-greedy mantra fits climate change neatly.

Wait six months for Saudi Aramco’s true value

11 December 2019

The oil giant’s shares jumped 10% on its first day of trading. A $1.9 trln valuation reflects an oversubscribed book, likely helped by hedge funds looking for a quick buck and local investors who may be incentivised to buy. A less pumped-up price should emerge over time.

Chevron $10 bln pain will soon look like peanuts

11 December 2019

Low prices and rivals’ disposals may have prepared shareholders for the U.S. driller writing down its Appalachian and other gas assets. But CEO Michael Wirth’s focus on short-term, low-capital projects only gives a respite from the bigger valuation hit of climate change.

Tullow points to dark future for oil’s minnows

9 December 2019

The explorer’s shares more than halved after it cut production targets and suspended its dividend. With climate change hanging over the sector, investors have little tolerance for firms that can’t meet even near-term promises. Weaker players will get swallowed up or vanish.

Aramco: the IPO that succeeded and failed

9 December 2019

The kingdom has got its $26 bln oil giant IPO away. But with a lower valuation, a smaller stake sale and a limited foreign investor roster, it’s a chequered achievement. With a crazy price target and a sceptical audience, Aramco’s float was flawed from the start.

E-book: Aramco’s flawed IPO

9 December 2019

The Saudi oil giant has got its $25.6 bln initial public offering away, but not with the valuation or investor base it initially hoped for. Breakingviews’ new e-book, which contains columns stretching back to 2017, explains how the world’s largest ever flotation came up short.

OPEC insures Saudi Aramco against first-day blues

6 December 2019

The oil producers club and allies will hold back 0.9 million barrels per day on top of an existing 1.2 million barrel cut. While only for three months, it’s a coup of sorts for de facto leader Saudi Arabia. And it means newly listed Aramco will start trading on a firmer footing.

London-Shanghai bridge leads back to Hong Kong

5 December 2019

SDIC Power postponed a plan to raise some $800 mln using a link between Chinese and British bourses. In rejecting a $34 bln takeover bid from HKEX, the LSE argued its partnership was a better route to the mainland. But the protest-hit financial hub can feel secure on this point.

Aramco IPO could disappoint Saudi on a new front

26 November 2019

The oil giant has takers for most of its $25 bln offer. Yet its 1.5% listing is too small to give the local bourse a big bump up in MSCI’s key emerging-markets index. The gap between the 5% listing originally touted equates to tens of billions of dollars of foreign money inflows.