Oil & Gas

Viewsroom: Oil M&A fight may end with no winner

9 May 2019

Occidental boss Vicki Hollub corralled BofA CEO Brian Moynihan and investor Warren Buffett to her side to seal a $38 bln offer for Anadarko. Her tactics scared off rival bidder Chevron but may alienate her own shareholders. Plus: Malaysia’s reform efforts since the 1MDB scandal.

Oxy wins Anadarko, and two years of questions

9 May 2019

Chevron will collect a $1 bln break fee rather than topping its rival’s $38 bln bid for the U.S. shale driller. Some Occidental owners will protest the lack of a vote on the deal at Friday’s annual meeting. Greater pressure may come in 2020 if the merger isn’t getting into gear.

Private equity’s North Sea bet safer than it looks

9 May 2019

Buyout groups are pumping billions of dollars into the hydrocarbon field off the UK’s eastern coast, as oil majors depart. Peak fossil fuel demand and decommissioning costs complicate the usual private equity exit strategy. But the acquirers also have ways to minimise the risks.

Exxon becomes test of investors’ carbon capture

6 May 2019

New York State and the Church of England want to split the chair and CEO roles and oust the board after the $328 bln U.S. oil giant squashed their emissions-reduction push. They have won peers over in other climate fights, but taking on Exxon’s top brass may be too much for many.

Refined Occidental bid leaves one box unchecked

5 May 2019

The $43 bln U.S. oil driller upped the cash in its offer for rival Anadarko. Financing from Warren Buffett and a side-deal to sell assets to Total make it look deliverable. Dispensing with a vote by Oxy shareholders should boost the bid too, though not investors’ peace of mind.

Shell’s low-carbon shift yet to charm investors

2 May 2019

The Anglo-Dutch group had a more profitable quarter than Exxon and is better placed for a greener future. But its valuation lags that of its U.S. peer, which finds more new reserves. Investors seem to care more about how much oil is pumped now than when crude demand will peak.

The battle for Anadarko: run the numbers

1 May 2019

Weigh up Occidental and Chevron’s competing cash and stock offers to adjust for the bidder’s underlying value, and how much value they can create.

Occidental is winning Anadarko battle by a mile

1 May 2019

The Texan shale producer’s stock has slumped since it offered $38 bln for its rival. The tie-up would rely on cutting costs in a single region, unlike a lower rival bid from Chevron. Yet even if Anadarko shareholders discount Oxy’s stock and planned savings, they’ll do better.

Buffett digs sweetest well in U.S. shale patch

30 April 2019

Berkshire Hathaway is putting up $10 billion to help Occidental fund its $38 billion bid for Anadarko. It’s a vote of confidence in Oxy’s unsolicited offer. As usual, though, the best deal will go to Warren Buffett himself, who can still win even if other shareholders lose.

Cash is the real prize in oil-patch showdown

26 April 2019

Forget diversification and other strategic chimeras as the rationale for Chevron and Occidental’s $38 bln battle for shale driller Anadarko. It’s all about sating oil investors’ irrational fixation on dividends. Bigger Chevron can pay more, Occidental has the greater need.

Shell has cover to take the high ground in Brunei

26 April 2019

A shareholder group wants the $260 bln energy giant to use its clout in the tiny Asian state to press for gay rights. Shell will be cautious of fallout elsewhere, but talks are possible. It has the leverage to open meaningful dialogue too. A fix, though, won’t be quick.

Occidental gives Anadarko an ill-judged bear hug

24 April 2019

Its $38 bln cash-and-stock offer trumps bigger rival Chevron’s bid for the U.S. oil producer, is a two-thirds premium and in theory helps both sides. Yet Occidental’s shares are less attractive and its debt would jump. Chevron only need sweeten its offer a bit to regain its edge.

Saudi Arabia will feel Trump’s Iran slap too

22 April 2019

The U.S. president will fully enforce sanctions on Tehran’s oil exports. Riyadh must pump more to prevent crude prices spiking further, which it has the scope to do. But doing Trump’s bidding will rankle OPEC peers. And the administration has a track record of changing its mind.

Aramco sale would grease Mukesh Ambani’s tidy-up

18 April 2019

The Saudi oil giant is eyeing a stake in the energy assets of the tycoon’s $127 bln Reliance Industries. That would aid Aramco’s strategic ambitions. It would also mean India’s biggest listed group could keep expanding its consumer-to-oil businesses without adding too much debt.

Notre-Dame melts France’s philanthropic froideur

16 April 2019

Luxury tycoon Bernard Arnault and oil giant Total are among those to have pledged a total of more than 600 mln euros to rebuild the fire-ravaged cathedral. France lags Germany and the UK for charitable giving. But restoring a national treasure makes moral and financial sense.

Chevron’s deal shines awkward spotlight on Shell

15 April 2019

The U.S. oil major's $33 bln offer for Permian powerhouse Anadarko may spark similar moves by rivals. The region’s independent players face challenges and are priced accordingly. Were Shell to play M&A catch-up, though, it would risk cramping its climate change-conscious style.

Chevron doubles down with $33 bln Anadarko swoop

12 April 2019

The $239 bln U.S. oil giant is buying its domestic peer in a cash-and-shares deal. Hefty synergies more than cover the offered premium. As rivals try to become greener, Chevron is sticking to what it knows by buying big in global oil’s key growth area.

Africa uprisings carry stark oil-addiction warning

12 April 2019

Veteran leaders in Algeria and Sudan have been unseated. Rising unemployment, inflation and weak growth are the immediate reasons why, but a broader common theme is too heavy a reliance on crude extraction. That’s not a problem limited to Africa.

Aramco frenzy is wrong measure of Saudi renewal

10 April 2019

Frantic demand for the oil giant’s $12 bln bond issue might be interpreted as a sign of support for the desert kingdom’s efforts to diversify its economy. Yet securing long-term investment is harder than selling securities. And only some of the buying reflects genuine enthusiasm.

Overpriced Aramco debt still has a Saudi discount

10 April 2019

Strong demand for the oil giant’s first bond allowed it to raise $12 billion at lower rates than expected. Borrowing costs are still higher than Western oil peers. But it makes little sense for investors to view the bonds as less risky than Saudi’s tarnished government.