Energy

South African blackouts mask $30 bln power problem

6 December 2018

State giant Eskom is rationing electricity supplies while seeking debt relief from the government. Big staff cuts would shrink losses and help assuage nervous bond investors. That will be tough for President Cyril Ramaphosa, but may be the only way to keep the lights on.

Saudi can pick a path through its OPEC minefield

27 November 2018

Riyadh must somehow please oil-producing peers who want to bolster prices and a U.S. president who wants the opposite. Crude costs will rise when Donald Trump’s temporary Iranian oil waivers expire. Saudi can appease both sides by making equally temporary reductions in output.

A cooling China may chill Sinochem Energy’s IPO

16 November 2018

The state giant wants to raise up to $2 bln by listing its trading and refining arm in Hong Kong. It can benefit from lower oil prices. But squeezed margins, volatile markets and jitters over demand at home won’t help. Smart pricing and Beijing’s support will make the difference.

GE may be canary in credit market’s coal mine

15 November 2018

The firm’s bonds tanked this week even as an asset sale briefly lifted its shares. That’s a warning shot for all credit investors. U.S. companies carry more debt than ever, and quality has deteriorated. Rising interest rates and slowing growth could make this a big problem.

Oil forecasting goes from tough to pointless

14 November 2018

In recent months crude has hit $86 a barrel, fallen to $65, and is now rising again. Oil prices drive other markets, but predicting them can be a waste of time. Changing demand outlooks, Saudi turmoil and Trump are only the most volatile of a series of uncertainties.

GE eases blow with Baker Hughes share sale

13 November 2018

The $70 billion industrial company is selling a chunk of its 62 percent stake in the oil-services firm a day after it said it urgently needed cash. The timing isn’t optimal. But it is better to do something than nothing, and GE can test the waters while saving dignity.

Mexico’s revolutionaries risk spoiling the party

12 November 2018

President-elect López Obrador doesn’t take office until next month, but he and his fellow leftists have already upset markets with moves to nix an airport project and rein in bank fees. Such fumbles could help guide Brazil’s far-right populist Jair Bolsonaro as he nears power too.

GE boss could face his own goodwill writedown

12 November 2018

The firm’s stock sank anew on Monday despite Larry Culp’s vow to speed asset sales. Repeated failures to draw a line under power woes and other liabilities have shredded GE’s credibility. The new chief risks falling into the same trap, and losing investors’ confidence.

Big Oil’s profit bonanza raises flaring risk

2 November 2018

Exxon and Chevron posted sharp earnings gains and the strongest cash flows since days of $100 crude. Texas drilling is rising and areas like Guyana are booming. But price rises may not last and investors are demanding greater returns. It’s not a time for spendthrifts.

Shell deserves to check out of investors’ doghouse

1 November 2018

The UK energy group slightly undershot earnings forecasts but generated oodles of cash in the third quarter. That compensates for a bigger disappointment earlier this year. Unless oil prices dive, Shell should be able to invest as much as it needs while rewarding shareholders.

Trump red-tape cost-cuts forget clean-air benefits

30 October 2018

The White House touts reductions in U.S. regulatory costs of $33 bln since the president took office. Yet clean air and water, in particular, bring huge social and financial benefits, including reduced rates of dementia. Saving short-term pennies will cost long-term pounds.

BP mends balance sheet roof while the sun shines

30 October 2018

The UK energy group is now financing its $10.5 billion BHP shale deal entirely from cash, instead of partly using equity. A gush of free cash flow justifies that show of strength. CEO Bob Dudley is, however, right to avoid other splurges given lofty oil prices may not persist.

Khashoggi showcases moral trilemma of big business

26 October 2018

Total sent its CEO to Riyadh for Saudi’s flagship conference despite its role in a Saudi journalist’s death. HSBC fielded a big team, too. Firms strive to be larger, profitable and ethical, but often only achieve the first two. Profit’s lead over ethics appears to be narrowing.

Climate suit should light fire under Exxon owners

24 October 2018

New York is suing the $338 bln oil giant, claiming it misled investors about carbon’s environmental risks. Shareholders weren’t dupes, though. Their proxy revolt last year forced the outfit to start addressing the issue. Legal heat should prod them to demand more than baby steps.

Strange solar deal puts sunlight on market mayhem

24 October 2018

Hanergy Mobile Energy wants to buy out Hong Kong-listed Hanergy Thin Film at a $27 bln value and take it public in mainland China. The same man behind the mess that has left the target’s shares frozen for years controls the parent. It hardly makes these market structures shine.

ABB belatedly succumbs to industrial revolution

19 October 2018

While European heavyweights like Thyssenkrupp and Siemens restructure, the $45 bln Swiss-Swedish group still sits on a largely unrelated power business. Now CEO Ulrich Spiesshofer is finally mulling action, he should opt for a full spinoff rather than a half-hearted partial sale.

Energy bigwigs fiddle while world burns

16 October 2018

The White House may nix a plan to breathe life into the coal industry. Exxon’s new support for a carbon tax could mostly hit anthracite, not its own fossil fuels. Avoiding devastating climate change requires serious commitment, not baby steps, putting yet more onus on investors.

Oil makes Saudi Arabia slippery sanctions target

16 October 2018

U.S. lawmakers are invoking a law used to impose Russian sanctions to demand answers about a missing journalist. There’s momentum for a similar penalty for the kingdom. But Saudi retaliation could hike oil prices - the opposite of what President Trump has been agitating for.

IPO procrastinators face a long wait on the shelf

15 October 2018

Oil group Cepsa, LeasePlan and Tencent Music have delayed floats due to the stock market selloff. That reasoning is dicey when others have listed without much of a hitch. Tricky IPOs need buoyant investors. With rates rising and Brexit looming, they may have missed the window.

Saudi adviser panel may unwind faster than Trump’s

11 October 2018

A forum of foreign executives has seen departures amid rising political tensions, as a U.S. White House CEO council did last year. Cozying up to princes and presidents confers an air of virtue and status. When it looks like advice isn’t being heeded, it goes quickly into reverse.