Chavez vulnerable to oil price downturn 3 Dec 2007 The Venezuelan caudillo s referendum loss prevents him cementing himself in power. The nation s economic difficulties are increasing, and a drop in oil prices would bring economic crisis. At that point, Chavez s popular support may no longer be enough to prolong his rule.
Buffett may beat Kravis’s return – with less risk – on TXU bet 3 Dec 2007 Berkshire bought $2bn of the debt at a big discount. Its yield could be more than the buyout s equity investors KKR and Goldman reap on a portion of the deal. And Buffett has secured a moresenior position in TXU s capital structure.
Gazprom $5 trillion ambitions suffer from Putin’s diktats 30 Nov 2007 The Russian oil giant wanted to be the world s first $1 trillion company. But PetroChina beat it handily. Now its chairman jokes it should aim for the $5tr mark. Even this will remain a pipe dream as long as the Kremlin, and not shareholders, call the shots.
Opec could come to regret a production hike 28 Nov 2007 The oil cartel is under pressure to push up production quotas by 2%. But this highly speculative market is already wellstocked. Additional supply could push the price down sharply, as happened a decade ago. A repeat would cripple some Opec members oildependent economies.
Investors ignoring British Energy’s nuclear potential 27 Nov 2007 The UK's nuclear operator should cash in with new nuclear power stations: it's got the sites where they'll be built. Sure, Gordon Brown has yet to give the green light. But poor operational performance at its older reactors shouldn't obscure the fact that British Energy looks oversold.
Kerkorian given a gift wrapped in poison 27 Nov 2007 The takeover defence adopted by Tesoro allowed the wily billionaire to withdraw his tender offer for 16% of the US oil refiner. With refining shares plunging since he kicked the deal off, Tesoro s board gave Kerkorian an out at shareholders expense.
E26bn wind IPO may not be hot air 21 Nov 2007 Iberdrola has set an ambitious price range for the upcoming IPO of Renovables, its wind energy division. But it's not outrageous given how much governments are pushing renewable energy and the barriers to entry inherent in wind farms.
$100 isn’t a nice round number for oil 7 Nov 2007 High prices provide huge profits for exporters. The main effects are slower global growth, worse governments and more financial speculation. The only silver lining high prices deter consumption. But higher domestic taxes would do the same thing, with much less trouble.
BP’s road should get smoother 23 Oct 2007 Tony Hayward warned of a dreadful quarter. It wasn't quite that bad. Still, most things that could go wrong did go wrong. It should be easy for the new chief executive to unveil better numbers going forward. But he'll have to carry through promised changes if BP is to impress.
Halliburton bloodies Schlumberger’s nose 22 Oct 2007 Investors lopped $20bn off Schlumberger s market value because of project delays. Meanwhile, rival Halliburton has been successful in chipping away at Schlumberger s dominance in the lucrative eastern hemisphere. These slipups will make it easier for Halliburton to take even more.
Hayward scrubs BP of Browne legacy 11 Oct 2007 The oil group s new CEO has set out on something akin to a cultural revolution that s also designed to cut costs and create greater accountability. So far, his plan is terribly short on detail. What s evident is a desire to remove the baronies that developed over the past decade.
Why isn’t Big Oil making big money? 10 Oct 2007 Nobody should cry for Chevron, BP and other energy companies. But with oil at record highs, it s odd to see a string of majors issuing profit warnings. Refining margins have collapsed while oil services continue to rise, squeezing profits. This trend will continue so long as oil trades at speculative levels.
Eni should know better than to lowball 9 Oct 2007 The Italian oil giant s £1.5bn hostile bid for UK producer Burren was immediately rejected. It had already received higher offers from other interested parties. While Burren looks pricey, Eni has synergies to exploit and it s in desperate need of diversifying and replacing its shrinking reserve base.
EU shouldn’t ignore Russian gas mess 2 Oct 2007 Statecontrolled Gazprom is welcoming a likely new antiRussian government in the Ukraine with a threat to cut off supply. The EU shouldn t think this mix of politics and economics is merely a postSoviet problem. The best answer is a buyers league, including China.
Bankers test the limits with energy MLPs 27 Sep 2007 Energy companies are spinningoff billions worth of assets into Master Limited Partnerships. MLPs promise to pay a steady stream of cash to investors. But the type of assets going into new MLPs could make that promise hard to keep.
Mol shareholders should pile on the pressure 27 Sep 2007 The Hungarian group vehemently opposes a E14bn offer from OMV, its Austrian oil and gas rival. Despite a 20% premium, the board won t talk. Yet Mol s shareholders are understood to favour a deal. Overcoming the shabby defence won t be easy, but investors aren t powerless.
Kazakhstan may be veering towards Putinism 27 Sep 2007 The cost doubling and two year delay at Kashagan has infuriated Kazakhstan, which bears much of the cost of the slippage. Putin tempts Kazakhstan to follow his tough antiforeigner policies and renew old ties. It will probably succumb to temptation.
E.on’s chairman gets the protectionist bug 25 Sep 2007 Wulf Bernotat, the head of Germany s largest utility, calls for companies to be protected from hostile takeovers. He s simply wrong. He also should know better. The Spanish government s hostility to E.on prevented it from taking over Endesa. Wulf is playing with fire.
Arabs sort of welcome 21 Sep 2007 US politicians have raised concerns about a 20% Arab stake in Nasdaq, but have kept quiet on a bigger Arab interest in an oil refinery. If there s a security question with one, there should be with the other. Political posturing is petty but still potentially damaging.
EU steps back from energy big bang 19 Sep 2007 The European Commission has softened its original plan to jolt open energy markets. It won t try to break up players like EdF and E.on. That was too tough to manage politically. Instead, the Commission is aiming its regulation overhaul at nonEU companies such as Gazprom.