Enel shouldn’t overload its green IPO 6 Apr 2010 The indebted Italian utility is planning to raise cash through an IPO of its alternative energy unit. Investor enthusiasm and peergroup multiples may help it reach the hopedfor enterprise value of 14 bln euros. But Enel should resist the temptation to load EGP up with debt.
Scorned refining sector ripe for bargain hunters 6 Apr 2010 Refiners have become the most unloved part of the U.S. energy business. With feeble demand and a global glut, investors now value them at just a quarter the cost of building new capacity. Such excessive pessimism creates opportunity for the bold.
Chavez pursues surprisingly rational oil strategy 5 Apr 2010 Venezuela s president may enjoy Putin s company, but his plans for developing Orinoco oil are more diversified than it might first appear. As well as Russian and Chinese consortia, he has involved Italian, Spanish, Vietnamese, Malaysian, Indian, Japanese and even U.S. companies.
Oil sands IPO shows investors’ short memories 31 Mar 2010 The stampede for Athabasca s shares is a tribute to Canada s extra heavy oil. Yet it was only two years ago the sector was hit hard by the economy. Greater bullying from Venezuela and its ilk make it all too easy to forget the potentially painful risks of another price slump.
Obama embarks on all of the above energy policy 31 Mar 2010 Expanded oil and natural gas drilling off the U.S. coastline won't bring America energy security, much less independence. But by throwing a bone to the drill baby drill brigade, the president may increase political support for his overall climate change agenda.
Ukrainian pipeline consortium could be win-win-win 25 Mar 2010 The new government wants a threeway consortium, including Russia and the European Union, to manage its gas network. The bold plan could end the gas wars, provide security to Russia and its customers and avoid the need to invest in expensive alternative pipelines.
Energy investors exit Russia as state power grows 24 Mar 2010 ConocoPhillips and TNKBP are cutting exposure to Russia's oil and gas sector. The circumstances of the two sales are different, but they both reflect growing state influence over the energy sector. Attracting new external investors which Russia claims to want will be hard.
Richest Brazilian reaps $3.5 bln from IPO stumble 19 Mar 2010 Eike Batista s reputation for a golden touch has suffered from slashing the sale of OSX shares. Even so, the shipbuilder raised $1.6 bln, and the billionaire s investment has multiplied 100fold on paper. OSX s new shareholders are betting there s more upside to come.
UK clean-energy policy confirmed as a pipe dream 18 Mar 2010 Britain can't cut greenhouse gas emissions by 80 percent by 2050. A coldeyed report from the UK's national academy for engineering stops just short of saying this but effectively concludes that no plausible scenario will see the target met. It's a welcome blast of reality.
Ticket home won’t be cheap for U.S. energy firms 17 Mar 2010 American gas shale has become a global rage. India s Reliance is the latest overseas energy group tempted by U.S. gasfilled rock. The demand has driven prices up. U.S. majors that chased foreign crude will want to act quickly before the return trip gets exceedingly pricey.
Consol gas buy could be wrong deal at right price 15 Mar 2010 The U.S. coal group's $3.5 bln deal to buy Dominion s gas assets looks like a bargain. But the investors who knocked Consol's price down sharply are right to be skeptical. By hedging its energy bets, the company risks confusing investors and sealing in a conglomerate discount.
CNOOC gambles to gain Argentine foothold 15 Mar 2010 The Chinese oil giant is paying $3.1 billion for an indirect stake in Argentina's secondlargest oil and gas group. The deal looks a pricey and risky way for China to satisfy its appetite for natural resources. But China's broader links with Argentina may justify the gamble.
BP deal confirms oil majors’ resource land grab 11 Mar 2010 The UK oil giant is paying $7 bln to expand its future reserves. The move into Brazil makes strategic sense and should provide highmargin growth after 2015. It underscores oil majors' dwindling options for growth: Exxon and Shell have also recently paid up for extra barrels.
Yukos might yet cost Russia 9 Mar 2010 Russian courts approved the dismantling of the oil company to pay back taxes. But it always looked political. Former Yukos shareholders are suing in international courts for as much as $100 billion. Russia probably won't pay up, but it could suffer if it becomes a scofflaw.
Why should anyone care about the Falklands again? 23 Feb 2010 Oil, naturally. The arrival of a rig to the islands has restoked tensions that led to the 1982 war. This time Argentina s international political position is stronger and Britain s government weaker. The driller Desire Plc may find its property rights vulnerable.
Schlumberger’s got some explaining to do on Smith 22 Feb 2010 The oil services giant is paying more for Smith International than is justified by the numbers. The cost savings support a bid at around $42 a share. So the FrancoAmerican group s $45 bid looks valuedestructive unless it hits an unexpected gusher.
Schlumberger can make a $9 bln Smith takeover work 19 Feb 2010 The market is punishing the oilservices giant over the rumored purchase of its smaller rival. But if previous deals in the sector like Baker HughesBJ are a useful guide, Schlumberger can afford to pay nearly a 30 pct premium without burning its shareholders.
Exxon’s new barrels not as tasty as the old 17 Feb 2010 With oil majors given the cold shoulder in many developing countries, it's no mean feat that Exxon managed to replace 100 percent of 2009 production. Even so, not all reserves are born equal. Exxon's new energy resources may be harder to extract or of lower value to investors.
FirstEnergy highlights challenges of utility M&A 11 Feb 2010 At first blush, the Ohio energy group's $8.5 bln purchase of Allegheny looks like a winner, with huge cost savings to harvest. But factor in the pounds of flesh that regulators will want to extract, and it may not be worth the trouble.
Repsol, Chevron brave Chavez expropriation risk 11 Feb 2010 Their new Venezuelan oil deals show they will take political risk to boost reserves. The costs are incurred upfront, while revenue arrives later tempting regimes like Chavez's to change the rules. Highercost reserves developed in safer regions offer more balanced risks.