Energy

Shell’s giant cash gusher is climate-change hedge

4 June 2019

The oil major plans to hand half its $250 bln market cap to investors from 2021-2025. As a result, the share of resources poured into capital investment will fall. It may look short-termist, but it’s really a sensible admission of uncertainty about the future of fossil fuels.

Carl Icahn is a problem of Occidental’s own making

31 May 2019

The activist is upset about the U.S. shale driller’s $38 bln purchase of rival Anadarko. Oxy boss Vicki Hollub pulled some shareholder-unfriendly moves, like avoiding a vote, even if Anadarko’s disdain for its owners made her do it. Icahn will be ready to pounce on any missteps.

Viewsroom: A new game of carmaker matchmaker

30 May 2019

Fiat Chrysler spurned Peugeot by offering to merge with France’s Renault, which is itself joined to Nissan. How will the pairings play out, and what does it mean for the automotive sector? Plus: Why fossil-fuel giants like BP are painting themselves a pale shade of green.

BP vote pours gas on Exxon’s climate fire

21 May 2019

Owners of at least a quarter of the U.S. oil major’s shares backed the overwhelming vote for more emissions pledges from its UK rival. BP’s support helped, but the result also shows the growing power of climate activists. Exxon’s decision to fight them now looks even more risky.

BP investors take the slow road to climate action

21 May 2019

Shareholders endorsed greater disclosure of the oil major’s compatibility with Paris climate goals, but rejected binding targets. It’s a start, but hardly matches the scale of the problem. Both BP and its owners appear unsurprisingly happy to wait for greater political urgency.

Oil market constrains Trump’s Iran war talk

21 May 2019

The U.S. president’s belligerent stance towards Tehran belies his dislike of costlier crude. While Saudi Arabia could increase output, it’s an imperfect hedge to the squeeze that would follow a conflict. Tight supply means Trump has little leeway for more than sabre-rattling.

UK may swap one utilities dogma for another

15 May 2019

If elected, opposition Labour leader Jeremy Corbyn could nationalise water and energy networks below market value. Crudely ditching privatisation for state ownership carries legal and reputational risks. Better to lower the returns that regulators allow these companies to make.

Viewsroom: Oil M&A fight may end with no winner

9 May 2019

Occidental boss Vicki Hollub corralled BofA CEO Brian Moynihan and investor Warren Buffett to her side to seal a $38 bln offer for Anadarko. Her tactics scared off rival bidder Chevron but may alienate her own shareholders. Plus: Malaysia’s reform efforts since the 1MDB scandal.

Oxy wins Anadarko, and two years of questions

9 May 2019

Chevron will collect a $1 bln break fee rather than topping its rival’s $38 bln bid for the U.S. shale driller. Some Occidental owners will protest the lack of a vote on the deal at Friday’s annual meeting. Greater pressure may come in 2020 if the merger isn’t getting into gear.

Private equity’s North Sea bet safer than it looks

9 May 2019

Buyout groups are pumping billions of dollars into the hydrocarbon field off the UK’s eastern coast, as oil majors depart. Peak fossil fuel demand and decommissioning costs complicate the usual private equity exit strategy. But the acquirers also have ways to minimise the risks.

Exxon becomes test of investors’ carbon capture

6 May 2019

New York State and the Church of England want to split the chair and CEO roles and oust the board after the $328 bln U.S. oil giant squashed their emissions-reduction push. They have won peers over in other climate fights, but taking on Exxon’s top brass may be too much for many.

Refined Occidental bid leaves one box unchecked

5 May 2019

The $43 bln U.S. oil driller upped the cash in its offer for rival Anadarko. Financing from Warren Buffett and a side-deal to sell assets to Total make it look deliverable. Dispensing with a vote by Oxy shareholders should boost the bid too, though not investors’ peace of mind.

Shell’s low-carbon shift yet to charm investors

2 May 2019

The Anglo-Dutch group had a more profitable quarter than Exxon and is better placed for a greener future. But its valuation lags that of its U.S. peer, which finds more new reserves. Investors seem to care more about how much oil is pumped now than when crude demand will peak.

The battle for Anadarko: run the numbers

1 May 2019

Weigh up Occidental and Chevron’s competing cash and stock offers to adjust for the bidder’s underlying value, and how much value they can create.

Occidental is winning Anadarko battle by a mile

1 May 2019

The Texan shale producer’s stock has slumped since it offered $38 bln for its rival. The tie-up would rely on cutting costs in a single region, unlike a lower rival bid from Chevron. Yet even if Anadarko shareholders discount Oxy’s stock and planned savings, they’ll do better.

Finance’s green activists see path to climate hope

1 May 2019

An annual Wall Street-heavy confab on environmental risks is offering plenty to worry about. But a group of 340 investors like CalPERS and AXA is notching up wins, including against Equinor, Shell and other polluters. More concerted pressure can help slow global warming.

Buffett digs sweetest well in U.S. shale patch

30 April 2019

Berkshire Hathaway is putting up $10 billion to help Occidental fund its $38 billion bid for Anadarko. It’s a vote of confidence in Oxy’s unsolicited offer. As usual, though, the best deal will go to Warren Buffett himself, who can still win even if other shareholders lose.

European energy’s biggest M&A impasse has an exit

26 April 2019

Activist Knight Vinke has an idea to break the stalemate preventing Finnish group Fortum from taking control of 10 bln euro German utility Uniper. Splitting the latter’s business requires fellow investor Elliott and the two companies to compromise. That’s better than gridlock.

Saudi Arabia will feel Trump’s Iran slap too

22 April 2019

The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.

Chevron’s deal shines awkward spotlight on Shell

15 April 2019

The U.S. oil major's $33 bln offer for Permian powerhouse Anadarko may spark similar moves by rivals. The region’s independent players face challenges and are priced accordingly. Were Shell to play M&A catch-up, though, it would risk cramping its climate change-conscious style.