Energy

GE offers 100 bln reasons to divorce CEO and chair

20 April 2018

That’s how many dollars of investor booty the industrial group has incinerated since John Flannery replaced Jeff Immelt. The new boss wants to create more accountability. But that starts at the top. An investor proposal to separate the roles deserves shareholder support.

Qatar/Exxon love-in makes two types of sense

12 April 2018

Deepening its relationship with the Texas-based oil major would tie the Arab state more closely to the U.S. after recent tensions with Saudi Arabia. It also gets Exxon investing in infrastructure. That could open up the global market, to the benefit of both parties.

Russian stocks deliver sanctions face-palm moment

6 April 2018

The U.S. sanctioned Rusal and EN+, as well as related oligarchs like Oleg Deripaska. The danger that groups close to the Kremlin might get burned was pretty clear in EN+’s recent IPO prospectus. Governance and politics are as critical to such companies’ value as their operations.

Icahn sets himself tough task at SandRidge

5 April 2018

The investor wants a new board at the $500 mln oil group to ensure it’s sold for top dollar. He may even bid himself. Icahn has proved stubborn at Newell, Herbalife and elsewhere. But with another big shareholder, Fir Tree, thinking differently, SandRidge could test his patience.

Harbour closes in on $10 bln Santos at a price

3 April 2018

The private equity-backed outfit is offering 43 pct more for the Australian gas group than it did in August. That’s bold, even if energy prices have risen and the target is in better shape. Harbour must have re-run its spreadsheets, but Santos is wise to engage at this point.

Permian deal shows peril of wildcat discount

28 March 2018

West Texas-based Concho’s stock tumbled as it bought rival shale driller RSP for $8 bln. This is the first deal of its kind, and comes just as investors are becoming more risk-averse. But assuming scale does bring some benefits, it’s better to be early than late.

Duke Energy draws power from climate activism

22 March 2018

America’s largest electricity generator plans to phase out coal and slash carbon emissions. Gas and renewables make business sense regardless of the Trump administration’s policy-reversal efforts, it claims. Duke’s stance and transparency put Exxon’s climate disclosures to shame.

Cox: Aramco and Amazon encourage bad behavior

15 March 2018

Global financial capitals are prostituting themselves to accommodate the Saudi oil giant's IPO. Amazon's competition for a second HQ is provoking U.S. municipalities to similarly ingratiate themselves. This "Aramazon" effect exemplifies how races to the bottom get started.

German utilities give new setup chance of success

13 March 2018

E.ON expects 600-800 million euros of synergies from its mega-asset swap with fellow German utility RWE. Both companies have announced better 2017 results than expected. That puts their carve-up of Innogy on a firmer footing.

German energy carve-up generates good sparks

12 March 2018

RWE is splitting its ailing Innogy unit in a 22 bln euro deal with rival E.ON. The former will focus on generating power, while the latter specialises in distribution. A knotty asset swap obscures the value picture. But the plan enjoys stronger logic than previous reshuffles.

Oil can do better than “shale, stale and male”

9 March 2018

The energy industry has an abysmal record of hiring women – and the CERAWeek energy confab in Houston reflected rather than addressed the problem. But as oil companies move jobs from the well to the lab, hiring women is logical as well as right.

Oil-obsessed U.S. is drilling itself into a ditch

8 March 2018

Shale producers are tilting the market such that international oil drillers will scramble for some time. That’s provoking creative thinking. From Aramco to BP, large international oil firms are planning credibly for a lower-carbon world. Eventually, Americans will come up short.

Beijing electric car leader runs on policy power

6 March 2018

A $4.5 billion backdoor listing offers the first pure play on China’s new energy auto market. Beijing Electric Vehicles leans heavily on subsidies and patronage - a precarious position as the central government reworks support for the sector. Its alliance with Daimler might help.

Trade tensions curb spirits in U.S. energy sector

5 March 2018

OPEC is breaking bread with U.S. shale producers at an industry confab in Houston. It’s a sign of American wildcatters’ influence on the global market. But infrastructure bottlenecks and Trump’s new tariffs threaten to prevent drillers from taking full advantage of their clout.

Exxon is running out of convenient excuses

1 March 2018

The $320 bln oil giant is ending its Rosneft partnership, blaming U.S. sanctions. CEO Darren Woods hopes investing $50 bln stateside will charm investors. But they’re concerned about returns and climate change. Exxon’s 10 pct stock drop this year suggests Woods is striking out.

Chesapeake solidifies shale role as OPEC sandfly

22 February 2018

The shale producer pumped more crude at lower costs in the last quarter – then sold it for more money. It can partly thank oil cartel OPEC, which has helped prices edge up. The Oklahoma-based driller joins a growing list of little wildcatters that are becoming a big annoyance.

CVC’s $5 bln Spanish gas punt is more than hot air

22 February 2018

The buyout shop is using its newly-raised 16 billion euro fund to buy Repsol’s 20 pct holding of Gas Natural. Acquiring minority stakes in listed utilities is not the stuff of private equity lore. But leverage and board seats could still deliver a respectable return.

EQT embarks on ignominious cleanup

21 February 2018

The $14 bln gas company’s breakup plan provides simplicity that’s much needed after the purchase of rival Rice. But with three pending transactions – all negotiated separately – shareholders face a tortuous process, run by a management that hasn’t proved it’s up to the job.

Venezuela’s crypto-currency reeks of snake oil

21 February 2018

President Maduro says early sales of its oil-backed petro raised $735 mln. Investing in the virtual coinage is tantamount to a bet on the increasingly autocratic administration’s probity, transparency and basic grasp of economic reality. Good luck with that.

OPEC’s widened tent would still be built on sand

16 February 2018

Oil-exporting countries are working to expand their alliance with Russia and others longer term, the UAE oil minister says. That’s just as production numbers show U.S. drillers are set to pump more oil this year. OPEC’s tent can widen, but it will still face a production gale.