Revived Santos can turn from prey to predator 21 Feb 2018 Full-year results show the $9 bln Australian gas producer is on the mend, with a narrowing net loss, less debt and more cash. That vindicates last year’s rejection of an opportunistic bid. The next challenge is shifting focus to growth - which could send Santos hunting for deals.
OPEC’s widened tent would still be built on sand 16 Feb 2018 Oil-exporting countries are working to expand their alliance with Russia and others longer term, the UAE oil minister says. That’s just as production numbers show U.S. drillers are set to pump more oil this year. OPEC’s tent can widen, but it will still face a production gale.
Oil minors show up majors in more ways than one 7 Feb 2018 Anadarko and Pioneer Natural Resources not only beat earnings estimates and boosted dividends, they are reining in spending and focusing closely on shareholder returns. Pioneer is even pumping up investor-friendly changes to management pay. It’s enough to put Big Oil to shame.
Rio Tinto is due to unearth new growth ideas 7 Feb 2018 The $100 bln miner's latest results reveal a company cranking on all cylinders. Decade-high profitability led to nearly $10 bln in dividends and buybacks last year. Before long, though, investors may want boss Jean-Sébastien Jacques to find some other smart uses for the money.
Elliott’s fresh attack on BHP misses its target 7 Feb 2018 The activist fund has been nipping at the heels of the world's largest miner for months. Now it argues that unifying listings in London and Sydney could mean a $22 billion boost. It’s a lot of distraction and cost for an unproven gain. Simplicity is unlikely to be so lucrative.
Oil-patch merger should tick most of Icahn’s boxes 6 Feb 2018 Oklahoma driller Midstates wants to merge with the activist’s current plaything, SandRidge Energy. It could create considerable value from cost savings, and oust SandRidge’s CEO. In an ideal world, Icahn might prefer a cash offer, or an auction – but this is a pretty good fallback.
BP’s biggest hazard is size envy 6 Feb 2018 After years of Gulf of Mexico-related strife, the UK group is recovering. With oil prices high enough to pay comfortably for investments and dividends, the energy giant may be tempted to ramp up new projects in a bid to become bigger than Shell. That would be a mistake.
Wolf-pack clauses deserve shareholder howls 5 Feb 2018 More companies have been adding these elements to poison pills. But it took activist Carl Icahn’s campaign against SandRidge to thrust them into the spotlight. The goal is to prevent shareholders from speaking to each other. That should prompt owners to join forces to stop them.
Exxon, Chevron use OPEC to enable bad old habits 2 Feb 2018 The oil majors posted poor earnings despite the cartel’s production cuts boosting crude prices. They also plan to pump more black gold and increase investment, despite shareholder concerns about inadequate returns and climate risk. Last quarter’s flubs signal more mess to come.
Vietnam’s Thatcherism could use an extra push 2 Feb 2018 PV Power is the latest successful privatisation for Asia's fastest growing economy. Despite a broad anti-graft campaign, stake sales are going gangbusters, as is the local stock market. That makes it easy to refrain from enacting deeper reforms, but they'd help sustain momentum.
Google offers Aramco unlikely route to IPO heaven 1 Feb 2018 The Saudi oil producer is in talks with the search engine’s owner to create a tech hub in the kingdom, says the WSJ. There could be a secondary benefit. If investors valued Aramco the way they do Alphabet, the $2 trln valuation Riyadh wants from a future IPO would be a shoo-in.
Shell is flush enough to afford mistakes 1 Feb 2018 After negative free cash flow in 2016, the energy giant is back in the black. Shell can both comfortably pay shareholders and invest to ensure its survival after demand for oil peaks. The margin for error is welcome – it’s hard to predict how soon crude will fall out of favour.
Blackstone takes calculated risk on Nordic oil 26 Jan 2018 The private equity giant is backing a $1 bln venture to buy fields in Norway. Unpredictable demand for the black stuff means it’s a risky bet. But Blackstone is no stranger to the North Sea, and there’s logic in picking up profitable assets discarded by capital-hungry oil groups.
SandRidge dares Icahn to up the ante 24 Jan 2018 The $690 mln energy company is dropping the controversial, shareholder-unfriendly wolf-pack clause it used to try to defend a now-ditched merger. But it’s not yielding much on the activist’s other demands. That may prompt Icahn to target more than just poison pills and directors.
India’s $6 bln oil deal is slick for Narendra Modi 22 Jan 2018 ONGC’s purchase of the government’s holding of Hindustan Petroleum makes more sense for New Delhi than the buyer. The logic of an explorer purchasing a refiner is flawed. But the deal helps the prime minister burnish his economic credentials by hitting asset disposal goals.
Aramco IPO beggars needn’t feel like losers 19 Jan 2018 BAML, UBS and Barclays have missed the cut to be global coordinators on the Saudi oil giant’s mega-listing, Reuters reports. Forgoing big fees from a $100 billion IPO will be cause for garment rending. Then again Saudi is a risky client and the process is replete with uncertainty.
Sanctions purgatory haunts EU as much as Iran 15 Jan 2018 Donald Trump has again waived nuclear sanctions on the Islamic Republic, a short-term relief for the domestic economy. It’s also a near-miss for the European Union: fresh curbs on non-American firms in Iran could spark a transatlantic standoff. But the reprieve is only temporary.
China is stuck in a petroleum Catch-22 11 Jan 2018 A yuan crude futures contract could finally launch in Shanghai early this year, as the world’s largest importer tries to shake up a market dominated by London and New York. A new benchmark is within reach, but clear-cut success will require the unthinkable: embracing the dollar.
Cold snap chills prospects of U.S. coal subsidies 9 Jan 2018 The federal energy regulator nixed Energy Secretary Rick Perry’s proposal to prop up nuclear and coal power. Instead grid operators will be asked how to improve energy reliability. That’s more logical, especially after bad weather showed no fuel source is immune from disruption.
Sutherland embodied ups and downs of globalisation 8 Jan 2018 Former European Commissioner, trade chief and BP chair Peter Sutherland, who has died at 71, worked to make it easier for goods, capital and people to cross borders. His triumphs were blotted by corporate failures. Yet his legacy deserves to survive the current backlash.