Oil & Gas

Saudi Aramco is back, and a little less valuable

17 September 2019

The oil giant thinks its supplies will have fully recovered from drone attacks by the end of the month. That’s good for Aramco’s credibility, and also for a balanced global market. Yet investors now have a new risk to price in, and oil prices are more likely to remain subdued.

Oil market may help shale, not vice versa

16 September 2019

Producers of U.S. oil would struggle to ride to the rescue after attacks on Saudi oil fields put a question mark over the security of future supply. Even so, sustained high prices would be a happy outcome for companies that have a habit of digging themselves into a cash hole.

First oil cut isn’t the deepest for world economy

16 September 2019

Crude prices jumped almost 10% after weekend attacks on Saudi oil facilities took out over 5% of global supply. Though the spike is bad for already slowing global growth, reserves can make up for the shortfall. Escalating threats of Middle Eastern conflict would do more damage.

Drones detonate Saudi Aramco’s renewed IPO hopes

16 September 2019

Air strikes by Houthi rebels knocked out half the oil giant’s output. The drop should be temporary, and Saudi and OPEC peers need to cut production anyway to gee up crude prices amid weaker demand. Still, it’s another reason for investors to mind the risks of an Aramco listing.

Big Oil’s climate smokescreen is about to clear

13 September 2019

Exxon Mobil and others often cite a well-worn global warming scenario to imply their models are sustainable. A major study, by a body whose signatories represent $86 trln of assets, should make that harder. Especially as it will soon shine a spotlight on individual companies.

Some Aramco IPO banks look more equal than others

12 September 2019

The Saudi oil giant has picked nine banks as global coordinators for its revived listing. They all get bragging rights. Yet despite the implied equality, they won't all do the same job. Banks that led the first stab at the IPO, like JPMorgan, will still probably call the shots.

GE’s Larry Culp is playing a bad hand well

11 September 2019

The CEO is selling what he can to save what he must. Ceding control of oil services firm Baker Hughes will mean a hefty writedown for the conglomerate, but it brings divestments to nearly $20 bln on his watch and reduces leverage. That buys Culp time to fix GE’s troubled core.

Saudi’s new oil tsar makes a bad reshuffle worse

9 September 2019

Khalid al-Falih’s abrupt removal as energy minister follows the appointment of Crown Prince Mohammed bin Salman’s ally as chairman of oil juggernaut Aramco. The king and MbS call all the shots. But having a royal as the new oil supremo undercuts any gains from the new structure.

Carmakers’ antitrust probe is more smoke than fire

6 September 2019

A pledge by BMW, Ford, Honda and VW to cut emissions has caught the eye of a U.S. watchdog. Some aspects of their deal may deserve scrutiny. But competition between the four, and the industry, is fierce. It’s hard to see how their plans would leave consumers worse off.

European oil majors’ relative green halo slips

6 September 2019

The likes of Shell, Total and BP sound more serious than U.S. peers about curbing emissions to accord with the 2015 Paris climate agreement. New research shows that in the most important sense they aren’t. Increasingly, investors may do oil boards’ jobs for them.

Viewsroom: How money really can grow on trees

5 September 2019

Done right, reforestation can capture much of the carbon causing climate change. It would improve crop yields and water quality and lessen the power of floods and storms like Hurricane Dorian. There are good financial returns to reap, too. Plus: the Alibaba competitor to watch.

Russian oil group’s cash gusher could stay capped

5 September 2019

Surgutneftegaz shares have surged on reports of a new subsidiary, which may unlock its $50 bln cash pile. Yet the boss of the secretive $24 bln energy company is under U.S. sanctions and it’s at risk of fresh ones. The bonanza could just remain a buffer against bad news.

Exxon CEO risks fueling unholy investor alliance

4 September 2019

Darren Woods reckons human progress and the unreliability of alternative energy sources justifies investing more in emissions-laden fossil fuels. But his argument ignores the $293 bln driller’s poor returns. That may give financial investors common cause with climate activists.

New Aramco chair bears small plus and bigger minus

3 September 2019

The Saudi oil giant has appointed the boss of its sovereign wealth fund to head its board. Potential IPO investors might appreciate Aramco being distanced from the energy ministry. They may not be so keen that the new appointee looks even closer to the kingdom’s crown prince.

China’s oil and gas titans heed the call to spend

30 August 2019

President Xi Jinping called for a boost to energy security, and first-half figures suggest state giants were listening: $81 bln Sinopec, for one, nearly doubled capital expenditure. That contrasts with caution abroad. U.S. sanctions only add urgency to national service.

Listing Aramco in Tokyo has logic on its side

29 August 2019

In its lengthy quest to decide where and when it will list its shares, the Saudi oil giant may be leaning towards Japan. Tokyo’s reliance on Riyadh for oil supplies has always made it a valid choice. With other international bourses out of the picture, that may be reason enough.

TechnipFMC may work better with split personality

27 August 2019

The $11 bln French American oil and gas servicer is breaking in two not long after merging. Investors in the Paris-listed engineering unit will need a higher risk tolerance, though orders are booming. The remaining pipes and wells business should benefit from a higher multiple.

Viewsroom: WeWork unfurls the red flags

15 August 2019

The shared-office provider’s long-awaited IPO filing is packed with pointless life-affirming tropes. But it also details a host of conflicts of interest and other risks that should send investors running. Plus: India’s powerhouse Reliance is building a war chest for dominance.

Aramco’s valuation dreams become quasi-reality

12 August 2019

Put the Saudi oil giant’s latest dividend on Exxon’s forecast yield, and its equity nears Crown Prince Mohammed bin Salman’s desired $2 trillion valuation. Yet Aramco’s first-half payout was unusually fat. A more realistic approach would put a lower price tag on the delayed IPO.

Chevron’s M&A discipline looks smarter than ever

2 August 2019

The $225 bln oil major’s margins eroded in the latest quarter even as it ramped up Permian output. The effect was greater at rival Exxon. At least CEO Michael Wirth put Chevron investors first by refusing to outbid Occidental for Anadarko. But he still has a growth quandary.