Oil & Gas

Elliott flexes its two biggest muscles at Sempra

18 September 2018

The $32 bln utility agreed to add two new board members and says it will review a break-up. Meanwhile, Elliott’s lawyers won back a $275 mln fee from when Sempra bought Texas utility Oncor. Paul Singer’s fund specializes in persuasion and litigation. This time, both paid off.

U.S. oil producers lose grip on global crown

14 September 2018

Fields in Texas were meant to help make the country a bigger exporter of black gold than Saudi next year. But pipeline construction is delayed longer just as American inventories are falling. U.S. drillers risk losing control of the market the longer logistics problems linger.

Latam can exorcise returning decades-old demons

12 September 2018

Argentina’s peso crisis and the stabbing of a far-right candidate in Brazil echo the region’s past economic instability and political violence. Mexico’s oil industry, too, may revisit the 1970s; Venezuela is in a totalitarian time warp. But history doesn’t have to repeat.

Shanghai’s early market win threatens oil duopoly

4 September 2018

In four months, China's new crude futures contract built up an impressive 7 pct share of global turnover. Currency risk is a worry, and foreign traders remain on the sidelines. Even so, with Iran’s help, Beijing is on the way to building a credible benchmark.

Latam’s market-friendly shift is at a parlous pass

27 August 2018

Argentina’s faltering growth imperils President Macri’s reforms. Mexico has delayed oil liberalization. Brazil’s main pro-business presidential candidate looks weak. Losing fiscal nous and foreign investment in the region’s biggest economies would hit business and the poor alike.

China’s oil majors risk wasting a good trade war

27 August 2018

Earnings are gushing at energy giants including $210 bln PetroChina. They are benefitting from Washington’s belligerence, which has driven up crude prices and should open opportunities in Iran. The windfall, though, masks the need for extra investment, cost cuts and other reform.

Norway and Saudi face two sides of same problem

24 August 2018

Oslo’s $1 trillion wealth fund wants to shed its oil and gas stocks, but a cautious government may not let it. Riyadh’s $250 billion equivalent wants steady growth, but the state may push it into leveraged, risky ventures. Both need more independence, and less political meddling.

Texan oil dominance teeters on shaky ground

23 August 2018

Shale oil helped the U.S. state’s main ports become an exporter of oil for the first time in April. Producers are basking in prices up around 40 percent in a year, and profits that encourage pumping. Tariffs, rising costs and the ease of closing the spigots can quickly change that.

Aramco’s failed IPO is a beginning not an end

22 August 2018

Saudi’s oil company has called off its $2 trillion stock listing. An army of investment bankers has been spared the need to sell an overambitious deal to unwelcoming markets. But there are plenty more Saudi deals to be done – which advisers will hope can be more easily executed.

West Texas mergers test shareholder blind faith

21 August 2018

A gush of mergers in the oil-rich Permian Basin region has totaled nearly $30 bln in a few months. Consolidation brings down costs, which have been rising. But high prices leave scant margin for error, and synergies may be overstated. “Trust us” strategies don’t suit wildcatters.

Oil investors are complacent on climate change

6 August 2018

Shareholders in the likes of Shell aren’t holding companies to account on carbon targets. A Breakingviews analysis suggests why: they may suffer only mild losses if oil majors just run down their reserves. But doing nothing may backfire if governments take more radical action.

BP starts to differentiate itself in a good way

31 July 2018

The UK oil major’s net profit beat expectations in the second quarter, in contrast to rivals like Shell and Exxon. BP is generating free cash, doing logical deals and hiking output. A 5.4 percent dividend yield reflects past Gulf of Mexico problems more than future potential.

Saudi’s Aramco plan B is too clever by half

27 July 2018

With the oil giant’s listing stalled, Riyadh wants to lever it up to buy a stake in chemicals group SABIC. It shouldn’t overburden Aramco, and offers a roundabout way of getting money to the state. But compared to an IPO it’s riskier, and does less to boost Saudi capital markets.

Exxon long-term view is more than short-term worry

27 July 2018

With declining production, the $360 bln group is missing out on current buoyant oil prices. Chevron’s second quarter likewise fell short, but along with European competitors it is boosting share buybacks. Exxon’s owners can justifiably fret about the industry’s uncertain future.

BP takes worthwhile gamble with shale deal

27 July 2018

The $10.5 bln that the oil major is paying for BHP’s U.S. shale assets is a full price and allows the miner to finally extricate itself from an expensive mistake. But BP is plugging a strategic gap and can easily cut costs. That makes the price appear more reasonable.

Conoco escapes squeeze on Big Oil’s golden goose

26 July 2018

Infrastructure bottlenecks are depressing oil prices in America’s resource-rich Permian Basin. New pipelines should be running by next year if labor and steel problems don’t cause delays. While the $84 bln Conoco’s U.S. business is holding up, others may not be so fortunate.

Shell and Total can hand investors even more cash

26 July 2018

The Anglo-Dutch major has begun a $25 bln share buyback, months after its French peer. That may signal Shell lacks growth ideas, yet investing in new oil projects and green energy is also risky. Sharing windfalls from high oil prices with shareholders is the lesser of the evils.

Trump hardball may still become Iran oil softball

23 July 2018

The president’s Twitter attack on Tehran counterpart Hassan Rouhani doesn’t sound great for importers of Iranian crude. Yet U.S. sanctions policy is volatile - just ask Russia’s Rusal. Another Trump goal - low petrol prices - implies Iranian exports will still be tolerated.

Aramco’s downstream diversion solves few problems

19 July 2018

Buying a stake in petrochemical maker SABIC would enable the Saudi oil giant to diversify its business. But it complicates the government’s plans to open state companies to private capital. And the holding is too small to pump up Aramco’s valuation in an initial public offering.

Exxon lobby exit boosts investor climate activism

13 July 2018

The $350 bln oil giant has quit a group trying to ease regulation of greenhouse gases. That’ll make it harder to fend off shareholders pushing Exxon to tackle how climate change will hit earnings. California cutting its emissions ahead of schedule shows that’s a growing risk.