Oil & Gas

EQT victors have two sets of activists to please

10 July 2019

The Rice brothers have won control of the underperforming $4 bln U.S. natural-gas producer which bought their company in 2017. They aim to turn around EQT within a year. Skeptics of the original tie-up, like Jana, will be watching – and climate-aware investors could show up, too.

OPEC extends its awkward holding pattern

1 July 2019

The oil-producing group and allies like Russia can probably gee up prices a little by prolonging output cuts brought in last year. Gulf tensions should offset a demand-led hit to prices. But they will also make big contracts like Exxon’s $53 bln one in Iraq harder to close.

DP World nets decent deal due to tricky IPO waters

1 July 2019

The $13 bln Dubai-listed port operator bought energy shipping company Topaz for $1 bln including debt. The buyer has avoided overpaying by sticking to its guns on the price. And Renaissance Services, the majority owner of the target, avoids a risky shot at a public listing.

American M&A makes excess great again

28 June 2019

U.S. deals jumped 19% in the first half even as activity ebbed in Europe and Asia. Topping the list are pricey purchases by AbbVie, Bristol-Myers and Occidental, plus Raytheon’s questionable merger with United Technologies. Most buyers’ owners will regret their CEOs’ ambitions.

Carl Icahn lands blow on weakened Occidental

27 June 2019

The activist’s bid to oust four directors at the oil driller over its $38 bln purchase of rival Anadarko is overkill. The board will face a grilling next year anyway. But the rash deal has tested investors’ patience. Oxy might be wise to compromise and give Icahn a partial win.

Pushy dealmakers ignore their best M&A advisers

26 June 2019

AbbVie and Occidental have structured huge acquisitions so shareholders don’t get a vote. Research suggests that when owners get a say, as happens more often in the UK, it can save a lot of scorched value. Bypassing them means acquisitive CEOs are losing a valuable sanity check.

The Exchange: Escaping carbon’s grip

25 June 2019

Saipem made its name building drills and pipelines for fossil-fuel giants like Saudi Aramco. CEO Stefano Cao visits Breakingviews to discuss how climate change is pushing the company into greener projects – and how tech challenges and a need to protect margins will drive M&A.

Gulf oil risk response looks too sanguine

13 June 2019

The price of Brent crude jumped 2.5% after attacks on two tankers near the critical Strait of Hormuz. The U.S. secretary of state blames Iran. With oil still barely above $60 a barrel, the market reaction to this tense situation looks mild. That puts a lot of faith in cool heads.

Shell’s giant cash gusher is climate-change hedge

4 June 2019

The oil major plans to hand half its $250 bln market cap to investors from 2021-2025. As a result, the share of resources poured into capital investment will fall. It may look short-termist, but it’s really a sensible admission of uncertainty about the future of fossil fuels.

Carl Icahn is a problem of Occidental’s own making

31 May 2019

The activist is upset about the U.S. shale driller’s $38 bln purchase of rival Anadarko. Oxy boss Vicki Hollub pulled some shareholder-unfriendly moves, like avoiding a vote, even if Anadarko’s disdain for its owners made her do it. Icahn will be ready to pounce on any missteps.

Gazprom payout pledge yet to catch fire

31 May 2019

After a management shake-up, the $78 bln gas company says it will pay out half its net income in dividends in coming years. That would please the state, which has been pushing the issue. But the implied dividend yield of 15% suggests investors doubt the bonanza will happen.

Viewsroom: A new game of carmaker matchmaker

30 May 2019

Fiat Chrysler spurned Peugeot by offering to merge with France’s Renault, which is itself joined to Nissan. How will the pairings play out, and what does it mean for the automotive sector? Plus: Why fossil-fuel giants like BP are painting themselves a pale shade of green.

Chevron’s North Sea deal eases its wounded pride

30 May 2019

The U.S. oil major has sold its assets off the British coast for $2 bln, at a better valuation than recent deals have fetched. Buyer Ithaca should still make a decent return. Chevron shows it hasn’t completely lost its dealmaking nous after being jilted at the altar by Anadarko.

BP vote pours gas on Exxon’s climate fire

21 May 2019

Owners of at least a quarter of the U.S. oil major’s shares backed the overwhelming vote for more emissions pledges from its UK rival. BP’s support helped, but the result also shows the growing power of climate activists. Exxon’s decision to fight them now looks even more risky.

Oil market constrains Trump’s Iran war talk

21 May 2019

The U.S. president’s belligerent stance towards Tehran belies his dislike of costlier crude. While Saudi Arabia could increase output, it’s an imperfect hedge to the squeeze that would follow a conflict. Tight supply means Trump has little leeway for more than sabre-rattling.

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.