EDF wants British Energy – but maybe not all of it 9 May 2008 The French electricity group s bid for the UK nuclear group shows it needs to build up its powergeneration capacity in the UK. But EDF needs money for other projects, and doesn t want to raise competition concerns. That could still leave the door open to allies like Centrica.
No number too high for oil price forecast 7 May 2008 The price can keep going up and up, just as long as money flows freely to commodity buyers and the oil supply stays a bit squeezed. So experts can plausibly suggest $200 or more. But when the money's spigots tighten enough, the price will tumble. Even bulls expect $75 oil.
BG puzzles with $12bn bid for Australia’s Origin 30 Apr 2008 The UK oil and gas exploration group is paying a 40% premium to Origin s share price to bolster its presence in the fastgrowing Asian LNG market. Origin s gas reserves are attractive. But BG would also get more than 3m Australian retail customers, which looks less attractive.
Rockefellers’ Exxon governance clean-up worth supporting 29 Apr 2008 It s ironic the descendants of the man who created Standard Oil are lobbying Exxon to go green. That s exactly the kind of issue a nonexecutive chairman, separate from the CEO, would be in a position to evaluate. Of the four Rockefeller resolutions, this is the one to support.
Gazprom muscles in on TNK-BP 24 Apr 2008 The Russian shareholders of TNKBP, the oil producer, may be giving in. Vedomosti, the Russian daily, has reported that Gazprom, the Russian energy colossus, could buy them out by the end of the year. It only took heavy pressure from the Kremlin and a police raid on the company.
Oil price bubble keeps on expanding 22 Apr 2008 Oil isn t in shorter supply now than a month ago, but it s 18% more expensive. As always in bull markets, optimists can find semigood reasons for higher prices. But the main propellant is monetary. The credit squeeze hasn t hit commodity buyers and speculators, yet.
Berlusconi’s Putin mania is really worrying 21 Apr 2008 The new Italian PM s meeting with the new Russian premier underscored their longstanding chumminess and included a sick joke about shooting a journalist. As expected, Berlusconi s Russianleaning diplomacy threatens to take him away from European commitments.
Investors are rational to mark up Repsol and BG 15 Apr 2008 Shares in the Spanish and UK energy groups soared nearly $10bn on news that their Brazilian partner, Petrobras, had discovered up to 33bn barrels of oil off the coast of Brazil. The discovery can t be verified, but the market may not be irrational.
RWE throws down gauntlet to EDF in British Energy auction 10 Apr 2008 By making an indicative £11bn cash offer for British Energy, the German utility is clearly serious about winning the auction for the UK nuclear group. But EDF must still be considered the front runnner, particularly if it partners with Centrica, as it should be able to pay more.
Mooted EDF-Centrica tie-up underlines EDF need for allies 4 Apr 2008 The French electricity giant has plans for foreign expansion but is afraid its stateowned status won t make it welcome in Europe. That s why it needs local allies like Centrica of the UK to take over British Energy, or ACS of Spain for a potential bid for Iberdrola.
Gazprom’s North African push underlines production problem 3 Apr 2008 The Russian gas monopoly will get a stake in Libyan gas fields after swapping assets with ENI of Italy. More than just another power play, this is mostly a sign of Gazprom s need for new resources after failing to invest enough in research and production in the last few years.
China seeks to lock up its energy supplies 2 Apr 2008 Its $50bn export credit promise to Nigeria provides an inside track to the country s energy reserves. Nigeria needs infrastructure, and exportbased lending enables projects to proceed. China s international strategy echoes Cecil Rhodes more than it does Adam Smith, but it works.
BP’s luck may be up in Russia 25 Mar 2008 The oil major has so far navigated the treacherous waters of Russian politics better than rivals Shell and Exxon. But Russian authorities have been making hostile moves. It could be nothing, but with 20% of BP s oil production coming from Russia, losses there would hurt badly.
Exxon should settle with Venezuela 18 Mar 2008 A UK court freed billions of Venezuelan assets frozen last month over its row with Exxon. The Texan titan now as a decision: apply more pressure or settle the dispute quietly. While Exxon is in the right, it has little to gain by digging in its heels.
British Energy sale could spark utility feeding frenzy 17 Mar 2008 The UK nuclear power company is in talks over a possible sale. British Energy may have a patchy operational record, but it holds the key to £20bn to £30bn worth of new plants in the UK. The economics look juicy, if risky.
European power giants should hop the pond 12 Mar 2008 The Continent's big utilities may have hit a wall in terms of intraEuropean consolidation. But new opportunities lie in the US. The fragmented US power market is in dire need of capital and can give the Europeans more bang for their buck.
New Gazprom row is Ukraine’s doing 5 Mar 2008 A longbrewing dispute over gas prices has led to a new threat by Gazprom, the Russian gas giant, to cut supplies to Ukraine. But infighting within the Kiev government, not Gazprom bullying, is at the heart of this latest dispute. Ukraine should clean up its act.
Iberdrola should avoid a scorched earth defence 28 Feb 2008 The Spanish utility s complaints to the EU and the Spanish regulator offer a bitter taste at how it hopes to shield itself by raising a legal and political ruckus. Instead, Iberdrola should focus its fight against France s EDF on extracting maximum value for shareholders.
China’s oil companies should stay at home 27 Feb 2008 In the race for resources, statecontrolled Chinese energy companies have made little headway in topping Western oil majors. While they have some cost advantages, this doesn t seem to be helping them nail the big contracts. There are better opportunities right under their feet.
Blackstone’s energy success may be tough to repeat 27 Feb 2008 The buyout shop has teamed up with Petroplus and First Reserve to buy US refining assets. It has a profitable history in the sector. But refineries look pricier than when Blackstone bought Premcor in 1997. And without much leverage, its returns could be hard to replicate.