Exxon’s $31 bln gas deal looks well timed 14 Dec 2009 The oil giant ticks many boxes with XTO. It gains a potentially lucrative foothold in US gas and gets a needed boost to energy reserves. The longterm bet strikes as gas recovers from historical lows. Plus, Exxon need only issue 10 pct more shares. All in, the deal seems smart.
Mexico’s $1 bln oil hedge is costly insurance 9 Dec 2009 The country has bought protection against the oil price falling below $57. Hedging worked spectacularly well for Mexico when oil prices plummeted earlier this year. But this latest move looks particularly expensive. No wonder so few oil producers do the same thing.
Russia should waive its carbon credits 9 Dec 2009 Industrial decline has given Russia one asset, a vast supply of tradable carbon offsets. But a sudden sale would flood an already fragile market. An offer to write off some of the credits would help make Copenhagen a success. Russia would gain politically and economically.
RUSAL should face Hong Kong scrutiny 4 Dec 2009 The Russian aluminium giant's plans to list in Hong Kong could still come unstuck if the exchange doesn't give it the green light. The exchange risks damage to its own reputation if it fails to ask hard questions about the legal risks facing RUSAL's investors. Here are two.
Carbon tax could kill two birds with one stone 11 Nov 2009 The IEA has set out targets to reduce emissions and the carbon price hikes needed to get there. The focus on price is helpful, and underlines the virtues of a carbon tax. As well as being a marketfriendly way to tackle climate change, taxes would also boost government revenues.
KNOC faces tougher oil quest than CNOOC 22 Oct 2009 The Korean state oil company s purchase of Canadian Harvest Energy secures future oil supplies, like recent Chinese deals. With energy security a hot issue everywhere, that makes sense. But Korea can t play as rough as China so KNOC needs to stick mostly to countries it trusts.
US petrol tax makes sense – even to Big Oil 21 Oct 2009 John B Hess s call for a $1 per gallon petrol tax is profitseeking. He s a big Hess stockholder and fears the political obloquy from a near$150 oil price. A tax helps by reducing oil consumption and cuts $120bn from the US budget deficit, deflating money market bubbleblowing.
Pandit avoids fight over Phibro 9 Oct 2009 The Citi boss could have made a case for keeping the commodities trading unit not least its consistent profitability over the years. But the brouhaha of a bank propped up by the government paying $100m bonuses was too overwhelming. Hiving Phibro off was the right call.
EDF-Veolia manoeuvres hurt both companies 7 Oct 2009 The French government already controls electricity giant EDF. Now it may be cooking up a scheme for EDF to get a stake of up to 20% in water group Veolia, along with the two groups sharing a chairman. Such an effective nationalisation of Veolia doesn t make sense for anyone.
Exxon’s West African venture is only a start 7 Oct 2009 The oil major is set to pay $4bn for a stake in Ghana s offshore Jubilee field. The deal would bring a big payday for the current private equity owners and raise the stakes for Ghana. But the tiny impact on Exxon highlights the challenge it faces replenishing its reserves.
Rising crude price brings oil sands back in focus 23 Sep 2009 Canada s huge but expensive reserves fell out of favour as oil prices plummeted from their 2008 peaks. But a price hovering around $70 a barrel makes investment attractive once again especially if recovering demand and dwindling supply support the price or push it higher.
EDF/Veolia merger idea deserves short shrift 11 Sep 2009 France is tapping up the boss of Veolia, Henri Proglio, to run state power group EDF. He may look like the best candidate on paper, but the government shouldn't let him resurrect his loony idea of merging the two companies.
Mexico can’t fix oil operations with fancy finance 8 Sep 2009 Mexico s $8bn oil hedging gain distracts attention from its operational failings. Pemex s resistance to outsiders caused oil output to fall in a region where others find recordbreaking fields. Economically suicidal statist policies can t be offset by even the savviest hedging.
Brazil’s populist oil plan little threat to majors 2 Sep 2009 Lula declared an independence day as he unveiled plans to retain more oil wealth. But unlike radical moves in, say, Venezuela, his changes merely bring Brazil in line with other oilrich states. And his contractfriendly approach reinforces the country s attractiveness.
Baker Hughes pumps up $5.5bn for BJ Services 31 Aug 2009 The US oilservices group is going back in time to acquire its onetime subsidiary. The deal highlights the extent to which technologies used to extract energy from unconventional or largely depleted fields have returned to the fore in a world of dwindling access to oil and gas.
Plummeting natural gas trips producers, investors 19 Aug 2009 A price spike in one product should increase demand for alternatives. But despite oil s rise, natural gas is at a sevenyear low. They may come from the same fields, but they re not interchangeable. And a growing supply glut is causing the gas market a lot of indigestion.
China’s unemployment fears inflate oil prices 10 Aug 2009 That sounds a stretch. But the Middle Kingdom is buying more crude and producing more petrol than it needs. Part of the motivation is to minimise refinery unemployment. To avoid the social and political problems that come with lost jobs, China is stoking commodity markets.
Exxon Q2 stumble highlights long-term challenges 30 Jul 2009 The West s top company missed expectations. The halving of oil doesn t fully account for a 66% decline in profit. Decreasing production and sustained capital spending do. They also point to Exxon s conundrum: oil is getting harder to find and costlier to extract.
India right to reject US line on global warming 20 Jul 2009 A hard cap on emissions would unfairly stunt growth for a relatively low emitter. And US carbon tariffs could damage India's exports. But the populous country matters to global emissions goals. The US should compromise a carbon tax could be India's best option.
Areva sells crown jewel to pay for France’s bungle 29 Jun 2009 The French nuclear group is set to agree the sale of its highly profitable electrical transmission division. The disposal became unavoidable after the government dithered over supporting Areva s $12bn capex program. It s another black mark for French industrial policy.