Iberdrola takes cover with E1.3bn cash call 17 Jun 2009 The Spanish utility is raising equity it doesn t really seem to need. After all, it already has a disposal programme in place to cut debt. The cash call looks like an opportunistic insurance policy against any slippage in the planned asset sales.
Political fear of gas tax risks trillions 28 May 2009 US Energy Secretary Steven Chu s claim that a gas tax is not politically feasible seems wrong on two levels. First, Obama has sufficient support. Second, a gas tax would be a far better way to fight climate change than new CAFE standards and a cap and trade system.
After Shell, investors should pick harder fights 20 May 2009 The 59% vote against bonuses for Shell execs is a watershed moment for shareholder protest. But directors pay is typically a large, slowmoving target. Will emboldened holders now engage with management on more knotty strategic questions? That would be a much bigger revolution.
Russia gains from Austro-Hungarian energy spat 30 Mar 2009 Austrian OMV s attempt to take over Mol last year was rebuffed. The Hungarians feared the Austrians would sell out to Russia. But Russia s Surgutneftegas has snapped up OMV s 21% stake in Mol for E1.4bn a 93% premium to the market. That leaves Mol even closer to the Kremlin.
Suncor surfaces from oily sludge with $15.5bn deal 23 Mar 2009 The Canadian oil company is a leveraged play on dirty, highcost oil sands. Buying PetroCanada reduces Suncor s exposure to oil price fluctuations for better and worse. Substantial savings should please shareholders, however.
Recession catches up with E.on 10 Mar 2009 Utilities may be defensive, but they are not immune from the crisis. The German utility has cut profit forecasts, and its recent acquisitions in Spain, Italy and Russia aren t living up to expectations. There may be more bad news to come.
How Sarko sent Siemens into Russia’s nuclear embrace 5 Mar 2009 Siemens has signed up with Rosatom, the Russian stateowned nuclear agency. That will create a stronger competitor for French powerplants maker Areva, Siemens traditional partner. This wouldn't have happened without President Sarkozy s illadvised meddling.
Oil majors plan to tough out cheap oil 5 Mar 2009 The precipitous drop in the oil price has not led to cuts in investments or dividends at BP, Shell and Exxon. Yet production costs are still too high for comfort. The producers expect oil to recover, or costs to fall. It looks like a reasonable bet for now.
It can’t be that hard to find a BP chairman 16 Feb 2009 Paul Skinner s apparent withdrawal from the running to become chairman of BP should not be such a huge setback for the oil major. A proper international search should have thrown up more than one alternative candidate to the underfire Rio Tinto chairman. Here are a few names.
Exxon’s record $44bn profit makes tempting target 30 Jan 2009 During a financial crisis when the US government is strapped for cash, it s not hard to imagine windfall and other taxes springing into lawmakers' minds. But look again 2008 may have been great, but Exxon s business is in secular decline.
Shell boldly raises divi as cash pressures build 29 Jan 2009 Falling crude prices led to a sharp drop in the oil major s quarterly net profit. Yet Shell is upping its dividend, while keeping capex flat, which means debt will rise. Managing cash and costs is the biggest challenge facing CEO designate Peter Voser this year.
Schröder’s Putin links may tip balance at TNK-BP 16 Jan 2009 The former German chancellor is to be a supposedly independent director of TNKBP, the divided AngloRussian oil major. But his ties to Russian prime minister Vladimir Putin, and his chairmanship of a Gazprombacked pipeline, raise fears that Russia will call the shots.
Business kowtows to the new US administration 9 Jan 2009 ExxonMobil is calling for a carbon tax. Citigroup wants to rewrite US bankruptcy law to help mortgage borrowers avoid foreclosure. Such apparently selfless moves aren t surprising a bit of obsequiousness may influence Team Obama more effectively than acting obstreperous.
Buffett loses Constellation, gains stellar return 17 Dec 2008 EDF has pipped MidAmerican, the Buffettowned utility, for Constellation Energy. The Nebraskan billionaire would have liked to put $5bn or more to work. But on the $1bn invested so far, he ll now more than double his money in a year not bad for a broken deal.
Constellation trades a cheap deal for a risky one 17 Dec 2008 The company had to do something. But it has walked away from selling itself cheap to Warren Buffett in favour of a pact with French power company EDF. The new deal implies a much higher value on paper, but Constellation shareholders take the risk for no quick reward.
It’s every man for himself at Opec 5 Dec 2008 With the price of oil tumbling, the temptation for the oil cartel s strained governments to cheat on production cuts is too great. The influx of speculators has also weakened Opec s power. The cartel s attempts to talk up the oil price may be in vain.
EDF’s costly bid to divert Constellation from Buffett 3 Dec 2008 France s stateowned electricity giant is betting $4.5bn on a move to buy the US group s nuclear energy assets. The offer values the unit at twice the price it agreed to be bought by Warren Buffett in September. EDF investors are rightly unamused.
Lukoil unlikely to pay a fortune for Repsol 20 Nov 2008 Persistent rumours that the Russian oil and gas company is about to buy a 30% stake in its Spanish rival at a huge premium don t add up. Russia is struggling and funding is scarce in the markets. Even if the Russians came up with the cash, they might not be welcome in Madrid.
TXU’s PIK-toggle surprise batters bondholders 5 Nov 2008 Even stablelooking buyouts like the Texas utility are flicking the switch on PIKtoggle debt. That causes bondholders even savvy ones like Warren Buffett grief. Bondholders should steer clear of issues with these options, no matter how unlikely their exercise appears.
Shell comes of age 4 Nov 2008 The scale of the culture change at the AngloDutch company is remarkable. In 2004, the company was a twoheaded monster which seemed to have lost its way in national fiefdoms. But now neither chief executive nor chairman is British or Dutch. This change is welcome.