Energy

Britain’s blackout whodunnit has multiple suspects

20 August 2019

An initial report sheds inconclusive light on a major recent power cut. Wind and gas-fired generators, network distributors, and National Grid may all have goofed. One thing is clear: the UK needs to go big on battery storage to accompany its commendable rush to renewables.

Knight Vinke tilts at new European energy windmill

20 August 2019

The activist investor doesn’t want its 1.3% stake in Swiss utility Alpiq to be squeezed out in a delisting. The offer does look undervalued. But as with its other European energy interventions, Knight Vinke’s worthy crusade for shareholder justice faces stiff headwinds.

Germany would kill a few birds with one green bond

15 August 2019

Raising ring-fenced money to manage a shift away from fossil fuels would underscore Berlin’s focus on making the transition. It would also give eco-friendly finance a boost. And ideally, the government would exclude spending on a greener future from its balanced budget goal.

Aramco’s valuation dreams become quasi-reality

12 August 2019

Put the Saudi oil giant’s latest dividend on Exxon’s forecast yield, and its equity nears Crown Prince Mohammed bin Salman’s desired $2 trillion valuation. Yet Aramco’s first-half payout was unusually fat. A more realistic approach would put a lower price tag on the delayed IPO.

Britain’s power grid picks bad time to screw up

12 August 2019

A big UK power cut would be grim at the best of times for the system’s operator. But National Grid also faces upheaval from new price rules, the transition to greener energy, and a nationalisation threat. Even if blame for the mess lies elsewhere, it hands ammunition to critics.

Chevron’s M&A discipline looks smarter than ever

2 August 2019

The $225 bln oil major’s margins eroded in the latest quarter even as it ramped up Permian output. The effect was greater at rival Exxon. At least CEO Michael Wirth put Chevron investors first by refusing to outbid Occidental for Anadarko. But he still has a growth quandary.

European oil majors’ gas lifeline could be a noose

1 August 2019

Royal Dutch Shell and Total rely on gas for future growth. That’s greener than oil, but weak second-quarter results show the drawback of their exposure. More importantly, longer pay back times than shale projects may help explain why the pair trade at a discount to U.S. peers.

ConocoPhillips exemplifies oil’s cloudy future

30 July 2019

The $66 bln U.S. driller posted decent returns last quarter despite lower crude prices. It upped its buyback target and talks a better game than some on climate risk. But the poor showing of shares across the sector suggests investors don’t love either short- or long-term plans.

Centrica’s CEO exit is only partially deserved

30 July 2019

Under-fire boss Iain Conn will leave the UK utility next year. Had he quit oil and gas production sooner, Centrica shares might not have dived 70% during his tenure. But preparing an ageing utility for the energy transition while battling state price caps was a thankless task.

U.S. car-pollution pact cuts through D.C. smog

25 July 2019

California’s deal with BMW, Ford, Honda and VW shows the auto industry can cut U.S. emissions despite White House intransigence. The better match with overseas standards should aid progress and profitability. Add incentives to invest in electric vehicles and it’s a smart mix.

China’s hardline premier set peak for gigantomania

24 July 2019

Former premier Li Peng died on Monday. Infamous for crushing protesters in 1989, he was also known for championing the giant, controversial Three Gorges Dam. China still likes mega-projects, but officials can’t flout financial and environmental concerns so easily these days.

Driverless Argonauts are all on valuation quests

12 July 2019

Ford and VW value their new autonomous-car joint venture at more than $7 bln. SoftBank and others peg GM’s similar division at $19 bln. Yet estimates on revenue and timing are all over the map. And Google’s Waymo is leading on several metrics. Their real worth could be anywhere.

EQT victors have two sets of activists to please

10 July 2019

The Rice brothers have won control of the underperforming $4 bln U.S. natural-gas producer which bought their company in 2017. They aim to turn around EQT within a year. Skeptics of the original tie-up, like Jana, will be watching – and climate-aware investors could show up, too.

PG&E’s hands may slip on bankruptcy steering wheel

2 July 2019

The California utility is, for now, in charge of its exit from Chapter 11, where it landed with $30 bln of wildfire liabilities. But the less new capital it seeks, and the more it ties future cash flow to past costs, the more credible a rival plan from creditors will become.

The Exchange: Escaping carbon’s grip

25 June 2019

Saipem made its name building drills and pipelines for fossil-fuel giants like Saudi Aramco. CEO Stefano Cao visits Breakingviews to discuss how climate change is pushing the company into greener projects – and how tech challenges and a need to protect margins will drive M&A.

California’s green-power glut has a silver lining

24 June 2019

The Golden State wants half its electricity needs from renewables by 2025, yet last month reduced solar and wind production by the most on record. Expensive storage is the problem. That should soon change. Meantime, savvy companies can take advantage of sporadic free power.

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.