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.
Mexico runs short of gas as oil explodes 12 Sep 2007 Pipeline bombs in Mexico have driven oil prices to record highs. But the damage is more to natural gas and Opec is coming to the rescue. For Mexico the news is still bad. Factories will close temporarily. The episode is an extreme symptom of Mexico s resistance to progress. Pipeline bombs in Mexico have driven oil prices to record highs. But the damage is more to natural gas. And Opec is coming to the rescue.
Repsol’s ouster from Algeria looks political 5 Sep 2007 Algeria s booting of its Spanish partners from a major natural gas project looks to be more about politics than performance. With its coffers full, the Algerians see little value in partnering with foreigners, especially ones that curb it marketing its own energy.
Suez water won’t be the sizzling type 4 Sep 2007 The FrenchBelgian utility has to spin off its environment assets in order to merge with GdF. Markets aren t wild about the plan. No wonder. The new company will be almost bidproof, with 47% of the shares tied up in a pact. And political influence could stunt profitable growth.
Sarkozy prevails in GdF-Suez merger 3 Sep 2007 The French president has prevailed over the Suez chairman, and the French utility will shed its water assets before it merges with GdF. The French state will keep a controlling 40% stake in the merged E90bn entity. It looks like Sarko has borrowed from Putin s book.
Suez turns to a future without Gaz de France 30 Aug 2007 The FrenchBelgian utility s firsthalf results help show the politically inspired merger with GdF isn t necessary. Nicolas Sarkozy wants Suez to trim down. Suez wants the government to bulk up GdF. Unless one side blinks, the merger is dead.
Kazakhstan is no Venezuela 28 Aug 2007 The country is upset by delays and ballooning costs at its Kashagan oil field. But it is not about to throw its foreign partners out. The Kazaks will probably push its partners to give it a greater slice of the project s early profits to make up for the delays. The Kazakhs will probably push their partners to give them a greater slice of the project s early profits to make up for the delays.
Expanded trading investigation worsens BP’s woes 13 Aug 2007 The energy giant revealed that the US government has expanded its probe into possible manipulative energy trading. It is scrutinising four more years of BP s trading, putting billions more of the company s past profits under a microscope.
Belligerence, not oil, fuels Russia’s arctic antics 10 Aug 2007 The Arctic has only moderate oil wealth, mostly in the Russian zone. Thus it s not worth fighting over. However, Russian belligerence reflects a calculation that the West will generally cave in to economic bullying, in both cold and hot places.
E.on goes windy in Spain 8 Aug 2007 The German energy company will spend E1.3bn to buy and invest in wind power farm operator Energi E2 Renovables. It s part of a strategy. Like other European utilities, E.on hopes to gain from rising renewables valuations by listing its division. Investors should be careful.
Oil prices may be set to tumble 31 Jul 2007 At $78 a barrel, oil is so expensive even Opec says it s overvalued. But speculators continue to bid it up, despite record supply. Hurricane fears seem to be fuelling the speculation. But if the weather stays as calm as last year, oil prices could slip away.
TXU bid battle might be Franklin’s Alamo 27 Jul 2007 The US mutual fund has good reason for opposing the Texas utility's $45bn buyout by KKR and TPG. But thwarting the deal will be hard. The shareholder base is fragmented. And with the markets in trouble, the buyers might already be gagging on the deal.
Big Oil has a big slip 26 Jul 2007 ExxonMobil reported its first profit decline in 3 years, missing estimates. Special items and divestures were partly to blame. But declining production presents the biggest worry. The question is whether it s a blip or a sign of headaches to come.
Is BP silly not to pay silly money to traders? 24 Jul 2007 New chief Tony Hayward said he won t compete with Wall Street. He should rethink that given the importance of trading to BP s profits. The energy giant said trading income fell in the second quarter as it lost professionals to banks and hedge funds.
SunPower’s clever convertible two-step 24 Jul 2007 The solar power group is both issuing a convertible and lending treasury stock to hedge funds that want to short it. But under US accounting law, neither gimmick is considered earnings dillutive.
Goldman and Lehman dig deep on drilling deal 23 Jul 2007 Just as credit markets are wobbling, the firms are extending a massive $15bn bridge loan to merging drillers Transocean and GlobalSantaFe. But earnings visibility and the potential for growth make this a safe bet. The combined company will generate plenty of cash to pay debt.
Mol adds yet another shabby defence tactic 17 Jul 2007 OMV s bid looks dead in the water unless it gets some help from Brussels. But that isn t likely to come soon. The Hungarian oil company has resorted to hugely optimistic forecasts to justify rejecting an unwanted E13bn bid from Austria's OMV.
Accidents should not hold up nuclear power 17 Jul 2007 Occasional problems, such as the leak at Japan s Kashiwazaki plant, may be used by opponents of nuclear power to hold up new plants. But as energy and commodity prices rise, the economic and environmental cases for nuclear power grow stronger.