Oil & Gas

OPEC supply easing is more reset than U-turn

25 May 2018

Saudi Arabia and Russia may lift oil output by 1 million barrels per day. Though that could knock prices, production of the black stuff will be more in line with the cartel’s previously agreed curbs. It’s a more far-sighted plan than allowing the value of crude to keep rising.

U.S.-China trade gap is best filled with software

23 May 2018

Beijing plans to shrink the $375 bln surplus by buying commodities like oil and soybeans. Better to import intellectual property, and pay for the millions of unlicensed copies of Microsoft and Adobe products running in China. Local firms could use the productivity upgrade.

Rio Tinto can ease out of Indonesian mine mess

23 May 2018

The Anglo-Australian group may be ready to accept $3.5 bln for its interest in Freeport-McMoRan's Grasberg copper operation. The offer is hardly full, but a deal would save on costs and frustration. It also should make it easier for both companies to extract from a tough spot.

Santos gambles on crude with $11 bln bid rebuff

23 May 2018

The Australian gas group rejected the last in a string of approaches from private equity-backed Harbour Energy. New Chairman Keith Spence is optimistically betting energy prices will stay high. Given the industry’s volatility, this could come to look like a missed opportunity.

Shell investors take a narrow view of climate risk

22 May 2018

The oil major easily fought off an attempt by shareholders to turn carbon-reduction ambitions into hard targets. That prevents it being hamstrung compared with rivals. But even the relatively enlightened Shell assumes oil demand forecasts that are vulnerable to political shifts.

EU’s Iran sanctions riposte is late and lame

18 May 2018

The bloc took 10 days to come up with a plan that will give its companies cover if they defy U.S. restrictions. That’s unlikely to stop businesses pulling out of the Islamic Republic. The dollar’s dominance in the financial system limits Europe’s ability to offer real protection.

Energy firms stuff MLP minority owners in pipe

17 May 2018

Williams is only offering a 6 pct premium for the quarter of its subsidiary it doesn’t own. Enbridge and Cheniere put even less on the table. The recent loss of some tax breaks makes MLPs less attractive and prompted the moves. But independent shareholders are getting a raw deal.

Maduro election win will soon be his loss

17 May 2018

Securing another term as Venezuela’s president in Sunday’s poll is almost a foregone conclusion. But the country’s collapsing oil output may finally mean Nicolas Maduro’s days in power are numbered. Successors will face the mammoth task of rebuilding the economy he has trashed.

OPEC high point is an Indian summer

16 May 2018

The cartel’s biggest member, Saudi Arabia, wants oil to reach $100 per barrel. West Texas bottlenecks offer hope prices could get close. But cyclical forces are at work. Fresh pipeline capacity will unleash a tidal wave of supply. With prices high, demand will fall, too.

Santos suitor clears one of three major hurdles

15 May 2018

China's ENN and Hony Capital, top owners of the $10 bln Australian oil and gas producer, have aligned themselves with bidder Harbour Energy. That's vital support for the private-equity-backed group. A rising oil price is a remaining complication, and government approval another.

Saudi risks squandering looming oil boon

14 May 2018

The scope to plug gaps left by sanctioned Iranian oil will help Riyadh’s budget. The surplus would be best spent on education and measures to grow the private sector. The danger is that the money will be used for flashy Vision 2030 state projects that look good but change little.

California helps Paris send solar message

11 May 2018

The most populous U.S. state is making panels mandatory on most homes built after 2020. It will cut emissions only a little. But the clean-energy focus will push other states along. Fossil-fuel producers will have fewer excuses to ignore the renewable writing on the wall, too.

Saudi gets new license to be selfish over oil

9 May 2018

Since 2016 the kingdom has championed output cuts that have drained a supply glut and helped spur prices. Now that the U.S. President has amped up sanctions on Iran, Saudi can fill any gap left by lower Iranian exports. What it loses on price, it gains in volume and U.S. gratitude.

The Exchange: The fate of Venezuela

8 May 2018

The OPEC member’s mismanaged economy is in freefall and its oil output collapsing. Siobhan Morden, head of Latin America fixed-income strategy at Nomura Securities, tells Martin Langfield how President Nicolas Maduro may lose power even if he wins a controversial May 20 election.

Qatar’s Rosneft stake is pricey insurance policy

5 May 2018

The Gulf state will take back 14 pct of the Russian state oil group after a $9 bln sale to China’s CEFC collapsed. That helps Qatar-backed Glencore keep a supply agreement with Rosneft. Firmer links with Moscow also give Saudi Arabia another reason to ease up on Doha.

Latam oil opening demands hedged bets

2 May 2018

The region's growing receptiveness to foreign investment in its energy assets could be a dream come true for oil majors. Political winds can change, though, and there is no perfect blend of hydrocarbon potential and legal certainty. Brazil and Mexico will do better than the rest.

BP’s marathon repair job gets sprint finish

1 May 2018

The UK oil major’s first-quarter results beat expectations. Costs from the Gulf of Mexico spill mean it needs higher oil prices than peers to generate free cash flow. But a mix of cost discipline on new projects and higher crude values mean BP should be able to keep gushing cash.

Marathon faces hard slog to justify $23 bln outlay

30 April 2018

The Midwestern oil group is paying a 24 pct premium for rival Andeavor. Becoming the largest U.S. refiner has merits. But its target’s stock was already up more than 50 pct in a year. Adding value means nailing cost cuts despite only limited geographical overlap.

Enel and Iberdrola’s Brazil war lacks restraint

30 April 2018

The two companies’ rival bids for Eletropaulo have nearly doubled the market value of Brazil’s top utility in a month, to $1.6 billion. The Europeans want to boost their presence in Latin America’s biggest nation. But the deal is too pricey to create much value for the winner.

Glencore can dig its way out of Kinshasa quagmire

30 April 2018

A former partner is threatening to freeze two of the $71 bln commodity giant's operations in Congo, demanding $3 bln. It's the latest in a list of woes in the African country, including a tough new mining code. But the 6 pct drop in the stock over the past week is overblown.