Oil & Gas

Big Oil’s generosity has limited shelf life

29 July 2021

Royal Dutch Shell and Total will return billions of dollars to investors. High crude prices mean they can cut debt, invest in green energy and crank up payouts. Such largesse may get harder given growing pressure to cut emissions. Prudent payouts will limit future disappointment.

BHP’s oil exit would be better sooner than later

21 July 2021

The mega-miner is reported to be mulling a $15 bln sale of its petroleum arm. The subsidiary’s status as a profit engine amid rising energy prices makes it a tough decision. But even if done at a knock-down rate, CEO Mike Henry can burnish BHP’s allure with oil-hating investors.

Aussie oil deal drills into some messy territory

21 July 2021

Embattled Oil Search rejected a $6.5 bln offer from rival Santos. A merger would help clear up the target’s poor governance and improve the bidder’s balance sheet. And yet a takeover looks a financial stretch for Santos and could devolve into a value-destructive bidding war.

Elliott aims for a more bite-sized Duke Energy

20 July 2021

The activist investor wants the large U.S. utility to split in three. That might help the parts to be better run, but they would also be easier to sell, and regulators might be more likely to let such deals through. A carve-up could be the cure for Duke’s underperformance.

Capital Calls: Chinese hacking, Tencent

19 July 2021

Concise views on global finance: When the only response to China hacks is harsh words, companies will pay the price; the $680 billion technology giant places a heavyweight bet on UK gaming group Sumo.

Oil nudging the $100 mark is not a terrible thing

6 July 2021

Crude prices have topped $75 a barrel as the recovery drives demand and a lack of investment hits supply. Higher prices should give majors like BP and Exxon a cash windfall to aid their green transitions. They will also drive big consumers to think about energy alternatives.

OPEC spats are less important than its sweet spot

6 July 2021

The UAE stymied a deal to unwind oil output cuts. That will further strain relations with Saudi Arabia, but Riyadh will probably find a compromise. Meanwhile, the cartel and its allies have unusual scope to keep crude prices high without losing market share to U.S. producers.

Viewsroom: Wall Street is open again and booming

24 June 2021

From Morgan Stanley to BlackRock, the world’s top investment banks and money managers are back in their offices and super busy with mergers, IPOs, LBOs and other activities thumping. Plus, Soho House and Wise go public and green hydrogen megalomania on the Congo river.

U.S. gas tax should be guzzled while it can

18 June 2021

America’s truck obsession is partly due to fuel prices that are among the lowest in the world. Upping the toll could help pay for a $1.2 trln infrastructure plan. Plus combustion engines are becoming obsolete and fuel usage is falling. Lawmakers might as well seize the moment.

Shell’s U.S. rethink betrays lack of wiggle room

14 June 2021

The Anglo-Dutch driller may sell assets worth $10 bln in Texas. Not so long ago the U.S. Permian Basin was a key oil major growth area, but now Shell is under pressure to cut emissions. Restricting carbon while earning a financial return is increasingly determining strategy.

Exxon defeat could lead drillers back to Texas

11 June 2021

The $265 bln fossil fuel giant’s board upheaval will prompt other drillers to merge higher returns with greener investments. Buying Texas oil ironically could fit that bill. Deals not only offer companies a way to cut costs. Acquisitions can actually help them look greener, too.

Capital Calls: Biden’s Big Corn battle

11 June 2021

Concise views on global finance: The U.S. president is caught between oil refiners and farmers in biofuel mandate.

Big Smoke offers Big Oil tips to avoid dodo status

9 June 2021

Fat dividends supported tobacco shares even as regulators focused on health risks. The outperformance of Philip Morris suggests investors like speedy pivots. Better still, hydrocarbon producers’ switch to green energy looks an easier ESG sell than tobacco substitutes.

KKR flips the LBO script with management “buy-in”

8 June 2021

Henry Kravis’s firm will list oil and gas firm Independence by merging it with publicly traded Contango. The latter’s shareholders will cede control while the chairman keeps his job, exchanging its highly valued paper for cheap assets. It’s a new twist on a management buyout.

Capital Calls: Turkish gas, Generali, Garuda

4 June 2021

Concise views on global finance: President Erdogan’s “good news” on hydrocarbons smells off; the Italian insurer’s 1.5 bln euro bid for NN Group’s asset management unit may trigger a shootout; the Indonesian flag carrier’s long struggle to avoid bankruptcy is coming to a head.

Jay Powell’s oil price bet counts on green inertia

3 June 2021

The Fed boss and his peers expect rebounding energy costs will only temporarily lift inflation. But if Western oil majors cut capex to please investors, crude could grow more expensive in coming years. Rate-setters are implicitly banking on a more gradual eco-friendly shift.

BlackRock’s green activism fires on some cylinders

2 June 2021

The $9 trln asset manager voted with a hedge fund against Exxon Mobil and for tougher emissions targets at Chevron. That’s progress. Still, its voting record with other oil majors like Royal Dutch Shell suggests it sometimes gives polluters a pat rather than the required shove.

Viewsroom: Big Oil’s global blow

27 May 2021

A small activist fund upended Exxon Mobil’s board while Shell was dealt a setback in a Dutch courtroom. At the same time, Chevron shareholders backed a proposal to cut more emissions. The interests of both stakeholders and shareholders are rapidly aligning in fossil fuels.

Oil giants’ setbacks turn BP from tortoise to hare

27 May 2021

Investors were initially sceptical about the UK major cutting fossil fuels, preferring the fuzzier plans of its U.S. and European rivals. Shell’s legal defeat and an investor revolt at Exxon Mobil change the game. Clarity on cutting emissions will increasingly support valuations.

Activist win at Exxon may change corporate America

26 May 2021

Dissident owners replaced at least two of the oil giant’s 12 directors, a huge feat. CEO Darren Woods and others are now on notice. A radical shift toward green energy is not easy. For Exxon, it may mean broader change, perhaps even an end to its century-old stock-market listing.