Energy

Capital Calls: BoE, Soros, Infrastructure, Pay

3 March 2021

Concise views on global finance in the Covid-19 era: The Bank of England starts to embrace the green transition; George Soros has some advice for France; Joe Biden gets a timely reminder of the importance of infrastructure; climate laggards risk getting hit in their wallets.

Xi’s green campaign will restructure state sector

3 March 2021

Shares in energy champions like Sinopec are rallying as they announce plans to serve Beijing’s carbon-neutral push. State firms generate 4.5% of global GDP; cleaning them would pay big dividends. But smaller players can’t pivot so easily. Green progress means dirty defaults.

Indian renewables SPAC sets temperate tone

24 February 2021

Goldman-backed ReNew Power is listing in New York via a blank-cheque firm. It’s a decent bet on India’s pivot to clean energy, with a structure and valuation that factor in the industry’s flaky customers. Future Asian SPAC deals in waiting may not be so well grounded.

Americans support a reliable grid, in theory

17 February 2021

Nearly 3 million Texans are without power days after a cold snap crippled infrastructure. Free market policies and the desire to avoid oversight deserve blame. Yet California’s power isn’t great either. Reliable grids are expensive. That’s unpopular for all political persuasions.

Capital Calls: Bubble alert

16 February 2021

Concise views on global finance in the Covid-19 era: Bitcoin burst through $50,000, and global fund managers are maximum bullish on the pace of the recovery from the pandemic.

Viewsroom: Tesla/bitcoin, Hydrogen, French finance

11 February 2021

Elon Musk has gone full cryptocurrency. Tesla’s $1.5 bln bitcoin buy is a wink to virtual-investment, anti-establishment fervor, if a challenge to accounting rules, Richard Beales argues. Meantime, Japanese carmakers are going gaga for hydrogen, and Parisian finance is in tumult.

Shell’s new plan tests investors’ green resolve

11 February 2021

The Anglo-Dutch group’s decarbonisation strategy will see it stay big in oil longer than BP. European investors now have a choice between Shell’s walking pace and its rival’s handbrake turn into wind and solar. It could become a gauge of how seriously investors take green issues.

Engie’s timid breakup needs green boost

11 February 2021

The $39 bln French utility’s shares have lagged peers for years. New CEO Catherine MacGregor is simplifying the rambling group by selling part of its services unit. Spinning off the renewables division could give the stock a roughly 50% bump, and enable more climate-friendly M&A.

Exxon Mobil-Chevron deal options

10 February 2021

The two U.S. energy giants have discussed combining. Either one could buy the other at a premium, or they could try a merger of equals. The financial shape of the combined company would be different in each case.

Capital Calls: KKR, the investment bank

9 February 2021

Concise views on global finance in the Covid-19 era: The private equity firm run by Henry Kravis is building a useful capital-markets business, with almost half its deals last year for outside clients.

UK wind auctions are frothy for a reason

8 February 2021

The toppy price paid by BP for wind turbine-friendly seabed reflects its desperation to pivot to green energy. But the UK’s subsidy-laden regime is also more attractive than those of other states. That makes wind maven Orsted’s reluctance to match the UK major even more striking.

Capital Calls: Super Bowl, Poison pills, Experian

8 February 2021

Concise views on global finance in the Covid-19 era: America’s game doesn’t benefit from scarcity value; Cubic’s poison pill serves a purpose; And Brazil’s cyberattack has a price for Experian.

Anglo takes quick, dirty route to greener pastures

8 February 2021

The miner may dump its African coal unit, worth maybe $1 bln. A spinoff could add six times that sum to the $45 bln group’s value by luring eco-conscious investors. Yet it doesn’t cut global emissions, and Anglo American’s iron ore assets may soon feel the environmental heat.

Enel will be hard to dislodge from green perch

5 February 2021

The Italian utility has become one of the world’s top renewable energy players and achieved stellar returns under CEO Francesco Starace. A booming green market and a big project pipeline mean its lead will outlast his tenure. Oil majors entering the market will trail behind.

Shell’s strength jars with sedate green strategy

4 February 2021

The $140 bln oil giant earned $4.8 bln last year as rivals made losses. Next week’s strategic overhaul is unlikely to involve big cuts in crude output or BP-style wind power targets. The cautious approach runs counter to its green-leader image – and the prevailing investor mood.

BP walks green high wire without a safety net

2 February 2021

The $72 bln UK oil major missed analysts’ expectations and announced a $6 bln annual loss. CEO Bernard Looney’s bigger problem is that his firm’s shares have underperformed since he committed to wind and solar. Investors may be fretting that his pivot from crude is too violent.

Exxon-Chevron tie-up is right deal, tricky time

1 February 2021

A potential $350 bln mega-deal entices on paper with savings that could be valued as high as $20 bln. That would shore up both companies against oil’s darkening future. Exxon would need humility, though, and government a desire for a fossil fuel champion. Both are huge hurdles.

Chevron looks exposed without cover from Exxon

29 January 2021

The $171 bln oil group's shares fell premarket on Friday despite a reduced fourth-quarter loss and steady production. Boss Mike Wirth is maintaining a strong balance sheet. That sets Chevron up well, but without its larger rival's usually same-day earnings, there's less to like.

Bond markets will be new climate vigilantes

27 January 2021

Booming demand for sustainable funds and new EU rules will make debt investors more wary of buying securities issued by polluters. There are already signs that is happening in the oil and gas sector. Higher funding costs should be a powerful spur for companies to get serious.

Climate activists melt Exxon glacier of truculence

27 January 2021

The $194 bln oil giant has largely ignored investors worried about the environment and that oil's best days are over. Now it may add independent directors, make greener investments, and cut capex. Credit squeaky activists plus a rumbling threat from institutions like BlackRock.