Oil & Gas

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.

Delta’s refinery is short of fuel-price alpha

12 July 2018

The $35 bln U.S. airline’s growing top line has so far outpaced the rising cost of oil. But the company warned fuel will squeeze its profit for the full year. The 2012 purchase of a refinery has only modestly mitigated the problem. To justify owning it, Delta needs more juice.

Aramco fail hits Saudi ambition more than coffers

10 July 2018

If the state oil firm's IPO doesn't fly, Crown Prince Mohammed bin Salman will be $100 bln short. That's huge, but higher crude prices will help the budget and Riyadh can borrow too. The bigger problem is finding other ways to lure the foreign capital his 2030 vision depends on.

BHP Permian sale hits reset on regional boom

9 July 2018

The mining giant is looking to offload shale assets in the West Texas area. A mooted price of around $10 billion suggests valuations are starting to drop. The Permian’s global clout remains, but until producers can fix pipeline bottlenecks, a more measured approach makes sense.

India’s Cairn Energy fire sale is short-sighted

9 July 2018

Tax authorities have sold part of a stake in Vedanta Limited seized from the UK company in a $1.3 bln tax dispute, weeks before the pair go to arbitration. India only pockets $216 mln, half what the shares were worth at the start of the year. The timing and the logic look flawed.

Aramco IPO retreat would leave few losers

6 July 2018

Pinning a $2 trln valuation on a company worth $1.6 trln was always going to be risky for the Saudi oil giant’s bankers. If Aramco’s IPO is scrapped, they may get another bite at a more modest cherry. It would, though, sting regulators who bent over backwards to accommodate it.

High oil prices are as American as apple pie

4 July 2018

President Trump’s sniping at OPEC seems to be led by concerns about spiraling petrol pump prices. But these aren’t high enough to stop drivers from hitting the road. And while the U.S. remains a net oil importer, surging domestic production will also help the economy.

Viewsroom: Trump goes hog wild on trade

28 June 2018

The U.S. president rejected hard-liners’ calls to ban China investing in sensitive U.S. tech. Yet he’s pushing for tariffs that could cost carmakers $45 bln and is livid Harley-Davidson will no longer make EU-bound bikes in the States. Plus: tapping China’s shale reserves.

BP’s electric car foray is imperfect oil hedge

28 June 2018

The British giant is spending 1 pct of its $16 bln capex budget on battery-powered vehicle chargers. That’s unlikely to protect against a drop in crude demand. But after writing down most of its last $8 bln push into new energies, investors doubt BP can reinvent itself.

China’s homegrown shale is worth the bother

27 June 2018

The People’s Republic produced a fraction of U.S. shale gas output in 2017. Terrain issues, deep wells and limited data explain why, yet better domestic technology and state support are pushing production up. With trade tensions rising, Beijing's costly hedge looks sensible.

Big Oil win over U.S. cities will be short lived

26 June 2018

A judge dismissed a long-shot lawsuit by Californian metropolises trying to hold Exxon and others liable for climate change. But many cities are slashing their CO2 emissions, which account for some 70 pct of the global total. Those attempts can pipe fossil fuels into obscurity.

GE breakup ushers in brave new era

26 June 2018

CEO John Flannery is spinning off the ailing $111 bln conglomerate’s healthcare unit and selling Baker Hughes, ending more than a century of growth. Focusing on aviation and power has risks, but the plan slashes debt and makes GE manageable. It was Flannery’s only logical choice.

Saudi Arabia finds OPEC solution that helps itself

22 June 2018

At the oil producer group’s Vienna meeting Riyadh needed to hike output without sparking an Iranian walkout. It succeeded, and in a way that could gee Saudi oil revenue. The catch is that President Donald Trump may soon twig that the deal may not help to curb high oil prices.

Saudis’ OPEC tightrope has trade war safety net

22 June 2018

The kingdom’s desire for oil output hikes faces pushback from Iran, its usual antagonist. Even if it strikes a deal in Vienna on Friday, lost supply from Venezuela may still push up prices. Riyadh’s saving grace could come if a trade war between the U.S. and China saps demand.

Activism and stubbornness collide at SandRidge

18 June 2018

Carl Icahn’s fight with the $550 million oil driller will dominate its annual meeting this week. Neither has a straightforward plan for ending shareholders’ misery. Meanwhile a takeover by rival Midstates could slip away. The priority should be to get that deal off the ground.

Permian drillers tap new resource in wastewater

14 June 2018

U.S. shale operators extract four times more water than oil from wells in West Texas. Disposing the dirty liquid is costly and threatens growth. But some companies are treating and reusing water to cut costs. A few even could turn this into a second business in a parched world.

Exxon muddies the picture with new trading push

12 June 2018

The $350 bln oil giant is bulking up in energy trading by poaching several veteran dealers from rivals. It could help mitigate fluctuations in the price of the commodity. But it also adds risk and opacity just as investors want otherwise, and does nothing for diversification.

Shareholder disquiet lights up Chinese gas M&A

7 June 2018

A $400 mln deal to sell Sino Gas to U.S. buyout shop Lone Star seems hasty, when the Australia-based firm has just won a key regulatory approval. A 19 pct premium looks ho-hum. If the board sees big risks ahead for foreign energy firms in China, it needs to better explain itself.

Shareholder climate activism needs more heat

5 June 2018

Owners of companies from Exxon to Rite Aid are asking for more disclosure on sustainability. That’s important, but insufficient. Ensuring bosses take climate goals seriously requires an informed board – and exec pay tied to green goals. These are what investors should target.

Petrobras CEO exit weakens Brazil’s adult oversight

1 June 2018

Pedro Parente had been a successful boss of the state oil giant until it cut diesel prices to placate striking truckers. Now his tenure looks more like a blip than the end of traditional government meddling. Petrobras’ share-price plunge is a warning about how the economy is run.