Oil collapse turns U.S export ban into jobs killer 16 Mar 2015 Overseas sales restrictions sent American crude prices below Brent in the shale boom. That was manageable. Now, with WTI hitting a six-year low, the ban threatens both workers and energy independence. Ending it, and the disparity, is fast becoming a job-saving necessity.
John Browne’s Russian truce points to oil M&A boom 2 Mar 2015 The former BP boss will head L1, a $10 bln energy fund owned by oligarch Mikhail Fridman. The duo once sparred over BP’s assets east of the Urals. Their alliance today highlights the deal opportunities created by oil’s rout - even if L1’s Russian roots are a problem.
Oil finally percolating toward a level price 26 Feb 2015 U.S. light crude has rallied 12 pct from last month’s six-year low but is still shy of where shale drillers can profit. Higher demand and less capital spending may push prices up while steady output from Saudi Arabia and others limits their rise. About $60 a barrel looks likely.
Iberdrola takes baby steps to grow U.S. business 26 Feb 2015 The Spanish utility is paying $3 billion mostly in shares to merge its U.S. assets with much smaller listed UIL. The U.S. has greater growth potential than Spain, and the price isn’t cheap. But the small cash outlay makes this a relatively low-risk, if not transformational, deal.
Petrobras downgrade tests Rousseff’s fiscal faith 25 Feb 2015 The Moody’s decision to strip Brazil’s state oil giant of its investment-grade rating redoubles the need for the president to support her economic lieutenants, who are trying to repair Latin America’s biggest economy. To do so, Rousseff will have to face down rising resistance.
Maersk definitively casts off conglomerate past 25 Feb 2015 The shipping giant has already streamlined and grown more open. Now it is shedding 20 pct of Danske Bank, the clearest break yet with history. Shares rose 6 pct. Transforming conglomerates can be like reorienting a super-tanker. But with focus in fashion, it’s worth the slog.
Cheap oil highlights multifaceted resource curse 24 Feb 2015 Commodities-dependent nations got more bad news, as BHP warned on iron ore prices. To survive, many will need to turn their economies upside down. Resources prevent long-term strategies, dull the good and bad governance gap and ultimately cloud voters’ views of who’s responsible.
Crude rout lays bare Big Oil’s opportunity deficit 18 Feb 2015 State-owned companies hold the best fields, while Western producers are lumped with the leftovers. High prices subsidized ever-bolder engineering projects during the boom. If low prices linger, a lack of good alternatives may push oil majors into another round of consolidation.
Chesapeake extracts self from all but its founder 17 Feb 2015 The energy firm has cut costs and debt since ousting Aubrey McClendon. Earnings have been decent, too. But complex terms of the ex-CEO’s exit have led to charges he stole secrets. It’s a lesson for companies enmeshed with creators that, when the time comes, clean breaks are best.
Transocean helps case against activist myopia 17 Feb 2015 The offshore driller is parting ways with the CEO who reinstated a dividend under pressure from Carl Icahn, and slashing the payout. Plunging rig rates mean Transocean can’t both invest for the future and return cash now. As a result, cage-rattlers may encounter sterner defenses.
Brazil scares away investment with Petrobras pick 6 Feb 2015 Dilma Rousseff tapped a party favorite from another state company, Banco do Brasil, to run the scandalized energy giant. Aldemir Bendine lacks oil industry experience and has been called a “puppet” of Brasilia. Brazilian assets deserve to trade at a steep discount.
Shell oils gears for climate-activist investors 3 Feb 2015 The Anglo-Dutch major is backing a shareholder resolution for more disclosure about how climate change might affect its business. The demands are hardly taxing, so a refusal might look defensive. But the episode highlights the growing power of environmentally focused investors.
BP hunkers down for prolonged oil slump 3 Feb 2015 The UK oil and gas major is cutting capital spending by 20 pct. That’s a robust response to cheaper oil for a company with a strong balance sheet, but BP has more problems than most. If such spending cuts keep coming from the industry, the oil price might rebound further.
Shareholders give Exxon the benefit of the doubt 2 Feb 2015 The oil major is keeping mum on spending plans even as rivals cut back. And it only beat Q4 estimates thanks to tax and legal breaks. Unlike Chevron, though, Exxon is still buying back stock, if less than before. Such relative resilience appeals to investors, but might not last.
ConocoPhillips dividend squeeze tests 2012 split 29 Jan 2015 The $77 bln oil driller is more exposed than larger rivals to lower crude prices after ditching its refinery arm three years ago. That translates into a Q4 loss of $39 mln and big cuts in planned 2015 spending. Dividends will stay high for now, but growth may suffer as a result.
Shell refuses to hit panic button 29 Jan 2015 The Anglo-Dutch major, which met its 2014 targets, doesn’t want to overreact to the oil price rout. It has cut three-year capex plans by a modest 14 percent and is maintaining the dividend. Shell has a strong balance sheet, but even it will need a sharper axe if oil stays low.
Petrobras will test even Brazil’s believers 28 Jan 2015 Long-delayed results by the $50 bln state oil giant failed to include an audit or scandal-related writedowns. The festering problem casts a cloud over national reforms by Finance Minister Joaquim Levy, who impressed the Davos crowd. Petrobras bonds, however, may be worth a look.
Monetary mess threatens gains from oil oversupply 27 Jan 2015 Too much production accounts for about half of the oil price slide, by one calculation. The surplus of cheap crude should boost oil-importers’ GDP. But the gains may not materialise, thanks to central banks’ ultra-low interest rates and wobbling anti-deflation credentials.
An $18 bln deal straightens out twisted pipelines 26 Jan 2015 The convoluted structure at Energy Transfer Equity isn’t doing it any favors. Combining two master limited partnerships it controls may generate some savings. More importantly, it makes the company slightly easier for increasingly skeptical oil and gas investors to understand.
Siemens faces big oil deal debacle 23 Jan 2015 The collapsing oil price turns the German engineer’s dash for shale into a costly blunder. Its $7.6 bln September bid for U.S. oilfield kit maker Dresser-Rand will stain CEO Joe Kaeser’s reputation. With shares of Dresser’s peers clobbered, a major impairment is looming.