Anadarko signals its future is out of its hands 21 Sep 2017 The oil firm is spending $2.5 bln to repurchase stock. Yet it’s unlikely to make money until 2020 and has $15 bln of debt. The buyback plan is an admission it can’t find profitable investments. It also implies CEO Al Walker is hoping for the oil price to rise or a takeover.
Exxon’s M&A machine faces Permian dilemma 15 Sep 2017 Buying a West Texas driller is the quickest way for the $337 bln oil giant to catch up with peers on replacing reserves. Valuations have fallen a third or more while Exxon’s remains steady. The trick for CEO Darren Woods is to find enough cost cuts to justify paying a premium.
D.E. Shaw’s rare activist shot falls short at EQT 14 Sep 2017 The hedge fund is calling for a breakup of the natural-gas company, echoing Jana Partners. Yet it’s content to let the company first buy Rice Energy for $6.7 bln despite the deal’s flaws. It’s an unconvincing foray into activism for a fund better known for computerized trading.
Viewsroom: Ray Dalio taps his inner communist 14 Sep 2017 Bridgewater’s founder thinks his kindred spirit resides in China’s anti-corruption czar Wang Qishan. Both seek radical transparency – though Dalio’s hunt is tied to forging a business in the Middle Kingdom. Plus: Exxon’s salvation may lie in the oil fields of West Texas.
Saudi can afford to scrap Aramco IPO plan 14 Sep 2017 Achieving the desired $2 trillion valuation for its crown jewel is going to be tricky. Instead of rushing the job, Riyadh may delay listing 5 percent beyond next year. Even then, political and pricing problems will remain. If it wants money, the kingdom has better alternatives.
Retailer Next confronts last corporate taboo 14 Sep 2017 The UK clothes chain has sketched out a scenario where high-street store sales keep shrinking until they can’t cover their cash costs. Even in that dismal situation, Next would be worth only a third less than now. Few companies consider their own demise in this way; more should.
Shell’s defence of big oil is too hopeful 11 Sep 2017 The Anglo-Dutch giant reckons demand will peak around 2030, but says crude oil will continue to play a major role in global energy supply thereafter. It’s a view that puts too much faith in the combustion engine’s survival – and China staying with its current course.
Rosneft sale deepens China-Russia co-dependency 8 Sep 2017 The world’s second-largest oil consumer and producer are tightening their embrace as CEFC China buys a $9.1 bln stake in Rosneft. A controversial debt deal with Intesa can be unwound and sellers Glencore and Qatar hang on to some upside. It's a better arrangement all around.
Viewsroom: Harvey’s path of financial destruction 7 Sep 2017 Texas is facing $180 bln in hurricane cleanup costs, the most of any U.S. natural disaster. The Lone Star State has the wherewithal and chutzpah to cover a large chunk, yet expects Washington to pick up most of the tab. Global water risks, meanwhile, may require $12 trln to fix.
Saudi reform rethink points to Aramco IPO risks 7 Sep 2017 The kingdom may water down plans to overhaul the economy. That could have implications for the partial privatisation of Riyadh’s most prized asset. If much-vaunted reforms can be delayed, so can a problematic sale that is unlikely to deliver the desired $100 bln windfall.
Hurricanes taunt Texas to put money where mouth is 6 Sep 2017 As Irma threatens Florida, the Lone Star State has $180 bln of Harvey damage to pay for. Most will come from the feds even though Texas hates big government. With low taxes, billionaires aplenty and a GDP that dwarfs the cost, minimizing D.C. aid ought to be virtually a state duty.
Hong Kong’s fresh Aramco pitch is flawed 5 Sep 2017 Stock exchange boss Charles Li is pushing a "Primary Connect" scheme allowing Chinese punters to buy into listings in the city. The aim is to lure the bumper Saudi IPO with the prospect of a flood of retail money. But mainland investors have a better playground at home.
Hurricane Harvey darkens forecast for OPEC cuts 1 Sep 2017 The oil cartel’s lower output was finally reviving prices before a storm knocked out around a third of U.S. refineries and dented demand. A glut of crude building up in tankers could force producers to rein in output even longer if they want to tilt the market in their favour.
Harvey’s damage will long outlast the storm 31 Aug 2017 The sun is out over South Texas but the toll from the hurricane’s record rains keeps rising. With refinery closures extending eastward and a chemical plant exploding, the governor says losses could top Katrina’s. Gas shortages and surging prices will spread the economic fallout.
Permian fracking risk takes new reptilian form 29 Aug 2017 Using local sand to squeeze oil from stone rather than bringing it in would let West Texas drillers cut costs, offsetting the tab for transport, permits and water. In an illustration of the challenge, however, that may endanger a local lizard. It’s a novel threat to profit.
Harvey exposes flaws in U.S. energy-dominance plan 28 Aug 2017 Trump aims to boost American fuel exports by fostering coal and oil drilling. But the deluge in Texas has disrupted 16 percent of the nation’s refining capacity. Tackling climate change and hardening energy infrastructure should take priority over the president’s pet projects.
Trump’s dressed-up coal pitch lacks rich seam 24 Aug 2017 A U.S. government report properly identifies cheap natural gas for making the solid carbon uneconomic and undermining grid reliability. Some suggested remedies make sense, but others seem designed more to appease a president pledging to save coal jobs than to address the problem.
Energy landscape is a battle for next Chevron CEO 22 Aug 2017 John Watson is set to step down as leader of the $200 bln energy giant after more than seven years. With oil prices low, a fresh approach may make sense. Yet Chevron has weathered challenges decently. Any new boss, especially if home grown, will struggle with long-term headwinds.
BHP uses commodity rally to fortify position 22 Aug 2017 The Anglo-Australian miner swung to an annual net profit of $5.9 bln. Plans to exit a troubled shale business and hold off on investing in potash chime with demands from Elliott, an activist hedge fund. The compromise, plus more focus on financial strength, looks sensible.
Total gives Maersk a crude $7.5 bln exit from oil 21 Aug 2017 The Danish conglomerate will get a 3.8 pct stake in French energy major Total in return for its oil assets. While the price looks good, Total’s stock has underperformed Maersk’s. At least Maersk investors may retain exposure to the rich synergies Total is predicting.