Oil’s new age of plenty challenges old assumptions 27 Dec 2013 Cheap shale, cheaper renewables, and increasing efficiency are creating a glut of non-OPEC crude, and bringing forward the peak of fossil fuel demand. Even if energy prices don’t fall sharply, there will be more volatility in oil prices, energy investments and geopolitics.
Shale energy deficit will hit Europe hard 17 Dec 2013 American companies have a big advantage over European counterparts: abundant, cheap gas. Fracking is more difficult in Europe and requires a step-change in public perception. Cheaper energy could provide the old continent with the fillip it needs. But it’s a pipedream.
McClendon IPO plan is echo of bad old Chesapeake 16 Dec 2013 He lost his job as CEO of the energy firm over spending and conflicts. A new $2 bln venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite McClendon’s knack for buying oil and gas properties, investor skepticism is in order.
Exxon’s world view looks darn good for Exxon 12 Dec 2013 In its closely watched industry outlook, the $400 bln gorilla sees natural gas usage surging 65 pct by 2040 and a bigger jump in shale oil. If right, that would support Exxon’s costly acquisition of XTO four years ago. Even then, however, the deal might not stack up financially.
Small cracks in U.S. crude ban aren’t enough 12 Dec 2013 America is granting a record number of oil export licenses, skirting a 100-year moratorium. But with output up 56 pct since 2008, this ensures the U.S. sells only a trickle abroad. That contributes to an $11 per barrel discount that harms drillers and America’s trade balance.
Spain makes a hash of energy policy 10 Dec 2013 The country’s energy sector has accumulated a 26 billion euros deficit due to the gap between production costs and consumer bills. Now the government is pulling the money it had promised to reduce the shortfall this year. Its constant flip-flops are worrying investors.
Mexico’s bold move may end 10-year oil decline 9 Dec 2013 The Senate is debating removing the state monopoly on drilling and creating a sovereign wealth fund. Letting outsiders control wells and log reserves should appeal to Big Oil. It’s a smart way to reverse the past decade’s 25 pct output drop while keeping proceeds.
Icahn’s Talisman revamp may not bring fortune 2 Dec 2013 The activist has won two board seats at the Canadian energy firm. But it was already clear that the $12 bln company needed to sell assets. With BP, Apache and Conoco also offloading wells, the problem is not so much the strategy as whether it can add value in a buyer’s market.
Proponent is odd part of $27 bln Canadian oil plan 26 Nov 2013 A west coast refinery to process domestic crude into products for Asia makes decent sense. What’s headline-grabbing is that the idea comes from David Black, a newspaper mogul, not from an energy specialist. Despite hints of Chinese financing, that makes the proposal seem flaky.
Repsol nears underwhelming YPF deal 26 Nov 2013 The Spanish oil group may accept $5 bln from Argentina as compensation for the expropriation of its stake in YPF. The snag? It might be paid in government debt. Still, investors expected less and Repsol probably has little scope to get more in this politically charged situation.
YPF’s expropriation rebound threatened by Apache 25 Nov 2013 The energy group has surprisingly rebounded since Argentina confiscated Repsol’s stake 18 months ago. The shares have doubled and output is rising. But that doesn’t justify going shopping. YPF needs capital for its $37 bln shale project more than it needs additional wells.
Fracking fortunes put naysayers on back foot 22 Nov 2013 The number of million-dollar earners in oil-rich North Dakota has almost doubled in a year. Average incomes are booming, too. Such wealth makes it easier to brush aside ecological worries over fracking. But smart policy doesn’t need to choose between regulation and profit.
Blackstone’s $6 bln oil deal signals another peak 20 Nov 2013 The sale of private equity-backed GeoSouthern to Devon comes at a toppy per-acre price. Blackstone has a knack for timing, evidenced by its own IPO and a record real estate transaction. The glut of undeveloped land owned by oil companies suggests finding buyers will get tougher.
China could make a go of carbon trading 20 Nov 2013 Being late to the CO2 party means China can learn from others’ mistakes - and if the market needs tweaks, it has no qualms about the odd intervention. The challenge is keeping participants honest - but anything that helps reduce China’s egregious emissions is worth a shot.
Are resurgent solar stocks burning too bright? 19 Nov 2013 Shares in panel makers like Trina and JinkoSolar have soared this year. Recent earnings show a long-awaited return to the black now that panel prices are recovering after an 80 pct slump. Profit growth is set to shine, but stock prices look to have gone too far, too soon.
Shale boom, EM growth to put refining on back foot 19 Nov 2013 Rising U.S. crude production and Asian demand are set to reshape global oil flows over the next two decades, according to the IEA. Changing trade patterns create opportunities for middlemen. But they’re bad for Western refiners, which face dwindling demand for locally produced products.
Hong Kong tycoons diverge in power plays 19 Nov 2013 The Kadoorie family’s CLP Holdings is buying local electricity assets from Exxon Mobil for $1.8 billion. That’s a contrast with rival Li Ka-shing who is reducing his exposure. CLP’s struggle to build an international business gives it an incentive to double down in the territory.
GE finally puts Jack Welch era out to pasture 15 Nov 2013 The conglomerate is spinning off its North America retail finance business. The move helps return GE Capital to its roots lending to mid-market companies and its parent’s industrial units, spelling the end of GE’s mission creep under its ex-CEO. That’s good news for shareholders.
U.S. utilities want to rain on solar parade 15 Nov 2013 A lobby group says solar power may put $170 bln of utility revenue at risk. Meanwhile Elon Musk’s panel installer SolarCity could quadruple sales in two years, and solar ventures abound. No wonder a big Arizona utility is fighting back with a fee on citizens with solar panels.
Peru swaps Brazil’s oil loser for China’s 13 Nov 2013 Petrobras is selling fields that pump about 16 pct of the tiny nation’s crude to PetroChina. Little distinguishes the two state-controlled titans. The inefficient Chinese group has lost $750 bln of market value in six years. Peru shouldn’t expect much of a partnership upgrade.