GE breakup ushers in brave new era 26 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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 Jun 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.
Gas move gives PetroChina first of several breaks 31 May 2018 China will cut some implicit subsidies for the fuel. The main winner is the $210 bln state-run giant, which as the country’s top supplier will lose less on imports. More freedom is likely to follow - benefiting investors while stoking spending in infrastructure and production.
Exxon shareholders dutifully take back seat 30 May 2018 One year after rebuking management over climate change, owners of the $330 bln oil giant turned quiescent. They toed the company line on pay, lobbying and splitting the chairman and CEO roles. If returns remain subpar, investors will have no one but themselves to blame.
Mexico may elect damp squib more than firebrand 30 May 2018 Left-wing populist Andrés Manuel López Obrador leads polls for July 1 presidential elections. AMLO, as he’s known, pledges infrastructure and social spending funded by ending corruption and waste, without higher taxes or debt. It won’t add up. For good or ill, he’ll underperform.
Brazil’s truckers drive toward a fiscal hole 29 May 2018 Protesters demanding lower fuel prices have won concessions from the Temer government. But the specter of revived subsidies and state meddling in oil giant Petrobras hit investor confidence and the real currency, part of the truckers’ problem. Fiscal laxity is not a solution.
Oil rally puts New Delhi in a bind 29 May 2018 As a major energy importer, India is in a tight spot. Taxes introduced when crude was cheap are now squeezing consumers. The government can’t reverse course without creating a budget hole – unless it makes up the shortfall by taxing ONGC and other producers instead.
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.