Energy

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.

Anti-OPEC bill may squeeze U.S. oil industry

10 October 2018

The disappearance of a Saudi journalist is helping to breathe life into a bipartisan effort to subject the cartel to U.S. antitrust law. But it may prove more useful as a threat than reality. America’s energy producers benefit from OPEC’s price-fixing, too.

China’s oil appetite won’t be enough to save Iran

8 October 2018

Beijing has resisted U.S. calls to cut crude imports once sanctions hit. But hopes that will be enough to offset a drop of as much as 1.6 mln barrels a day in Iranian exports look optimistic. Instead, it seems to be eyeing the old playbook of public bluster and quiet reductions.

Russia and Saudi’s oil stitch-up will unravel

4 October 2018

Moscow and Riyadh’s deal to boost crude output is the best chance of cooling red-hot prices. Yet the duo’s power is more limited than it appears. U.S. sanctions on Iran will dent the Islamic Republic’s supply faster than they can pump. Prices could still spike in the short term.

Cepsa prices itself to avoid IPO oily patches

2 October 2018

The Spanish oil group is going public at a valuation of 7-8 billion euros, the lower end of expectations. That will allow owner Mubadala to sell the required 25 percent at a premium to rival Repsol. Anything richer would have been risky among the current rush of listings.

Review: Shale oil exposé misses bigger picture

28 September 2018

In “Saudi America” Bethany McLean tackles the U.S. fracking industry. The author who spotted fraud at Enron accurately depicts aggressive wildcatters digging themselves to their demise. But factors that are pushing up global oil prices may yet save the industry from itself.

U.S. oil producers lose grip on global crown

14 September 2018

Fields in Texas were meant to help make the country a bigger exporter of black gold than Saudi next year. But pipeline construction is delayed longer just as American inventories are falling. U.S. drillers risk losing control of the market the longer logistics problems linger.

Latam can exorcise returning decades-old demons

12 September 2018

Argentina’s peso crisis and the stabbing of a far-right candidate in Brazil echo the region’s past economic instability and political violence. Mexico’s oil industry, too, may revisit the 1970s; Venezuela is in a totalitarian time warp. But history doesn’t have to repeat.

Hot summers are least of UK utilities’ problems

12 September 2018

SSE’s shares dipped after high temperatures and gas prices forced a profit warning. A cap on tariffs for retail customers will hit the sector further. And all energy companies have to work out how to cope with the falling cost of renewables and competition from new entrants.

UK power price caps will give banks jitters

6 September 2018

Britain’s energy regulator has put a ceiling on default energy bills. While Ofgem’s plan won’t hurt utilities as much as feared, the precedent is important. Domestic banks can only hope politicians fail to spot that their business models similarly rely on consumers’ apathy.

Skilling could have earned stripes more usefully

31 August 2018

The former Enron CEO was released from prison into a halfway house. During his time behind bars, corporate malfeasance flourished but prosecutions dropped. Using high-profile arrests as a deterrent doesn’t work if prosecutors don’t catch criminals. Felons could help.

Norway and Saudi face two sides of same problem

24 August 2018

Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.

Santos doubles down on independence with Quadrant

23 August 2018

Fresh from rejecting a $10.8 bln takeover bid, the Australian energy group is buying its Perth peer for $2.2 bln. The move tests a newly healed balance sheet, but investors value Santos equally as predator and prey. It’s a big bet on Quadrant’s new discoveries and the oil price.

Aramco’s failed IPO is a beginning not an end

22 August 2018

Saudi’s oil company has called off its $2 trillion stock listing. An army of investment bankers has been spared the need to sell an overambitious deal to unwelcoming markets. But there are plenty more Saudi deals to be done – which advisers will hope can be more easily executed.

Gas mega-merger hubris deflated by regulators

22 August 2018

Linde needs to sell more assets to close its $83 bln tie-up with Praxair. That means hurried disposals and fewer savings. The rationale for creating the world’s largest gas supplier holds, but the mess shows shareholders should apply a hefty discount to ambitious dealmaking.

China’s solar stress could burn more dealmakers

13 August 2018

Slashing official support for solar energy helped scupper Shanghai Electric’s plan to snap up a $2 bln stake in giant GCL-Poly’s core unit. A downturn should drive consolidation in the heavily indebted sector. But the doomed deal shows how hard it is for two sides to agree.