Oil industry steals page from pharma M&A playbook 3 Oct 2012 Honeywell’s purchase of Thomas Russell was the ninth oil services deal in as many days. Scavenging the deep sea and icy climes requires exploration DNA. Specialized technology is becoming to energy giants what biotech is to the drugs sector. Smaller firms are in big demand.
Shale gas-led U.S. boom is lesson for wary Europe 25 Sep 2012 In five years, the price of natural gas has halved in the U.S. and doubled in the UK. One result is an industrial renaissance in America. Europe could do with the economic and political benefits of plentiful gas, too. EU governments, reluctant to allow fracking, need to rethink.
Mexican oil giant can take lessons from Brazil 21 Sep 2012 President-elect Enrique Peña Nieto is eyeing Latin American lessons for revamping downtrodden state-owned Pemex. Mexican law bars private investment in oil, but related businesses are less constrained. Cutting taxes on Pemex is another option. Reform may have to start small.
Exxon picks right place at wrong time for U.S. oil 20 Sep 2012 A $1.6 bln purchase of North Dakota assets could herald more deals to come for the energy titan. The state is America’s fastest-growing producer, but its low jobless rate means oil production costs are soaring. Exxon’s renewed if belated interest in domestic crude cuts both ways.
New look U.S. MLPs riskier, but may be worth it 20 Sep 2012 The $350 bln tax-privileged master limited partnership sector mostly involves safe, fee-based energy assets like pipelines. Newcomers like Texas-based Susser Petroleum, a fuel distributor, aren’t so predictable. But high yields - 8.5 pct for Susser - can make up for the dangers.
Uncontrollable gas troubles U.S. energy firms 14 Sep 2012 U.S. production keeps rising even though companies like Chesapeake promise to cut it. Blame efficient techniques and bad luck. But failure to curb supply means low prices, depriving large producers of cash to drill for more profitable oil and leaving smaller players vulnerable.
New Delhi must stand its ground on subsidy cuts 14 Sep 2012 The government has announced a bold 14 percent hike in the price of diesel. Now it needs to stay the course, embrace the decision rather than apologise for it, and move fast to get even more done. A shift in public spending from consumption to investment is the ultimate goal.
Banks big winners from Chesapeake $6.9 bln sale 12 Sep 2012 Selling another batch of family silver helps close the gas group’s cash gap. That makes a liquidity meltdown less likely. But the broadest smiles ought to be at Goldman Sachs, which continues to get fat fees from Chesapeake’s rolling sales and will be repaid on a $4 bln loan.
U.S. shale pioneers won’t reap Chinese gas riches 11 Sep 2012 For the first time, Beijing is cracking open the door for foreign frackers. Smaller, specialist companies have blazed the trail in America, but to profit in the Middle Kingdom will take time and resources they don’t have. Instead, it’ll be the usual suspects like Shell and Exxon.
PXP’s $6.1 bln BP/Shell deal quacks like an LBO 10 Sep 2012 The $4.7 bln U.S. oil minnow is leveraging up to buy Gulf oil fields from the two majors. Asset sales and cash flow should cut debt within a few years. But shareholders will come second until lenders are happy - and there are operational risks too. No wonder PXP’s stock tanked.
Chavez’s cash pump PDVSA runs on empty 6 Sep 2012 Venezuela’s troubled oil group may now pay suppliers with IOUs instead of cash. That’s not surprising because Hugo Chavez is using PDVSA to finance social spending ahead of elections. Harder to imagine is what happens when oil prices decline from today’s lofty heights.
BP’s path to Macondo settlement just got harder 5 Sep 2012 U.S. lawyers say they’ve got emails showing gross negligence in the 2010 oil spill disaster. There’s still scope to settle before a trial, but the aggressive tack complicates BP’s effort to get a favourable deal. The market reaction - wiping $5 bln off BP’s value - looks right.
Oil spike doesn’t require emergency response 4 Sep 2012 Brent crude is up 30 pct since June, with WTI close behind. That’s sparked talk of rich countries tapping emergency oil reserves. The panic is premature. Short-term pressures are pushing crude higher. As these fade, so should the threat of a sustained, economy-wrecking oil price.
Argentina’s new YPF out to prove it’s no PDVSA 31 Aug 2012 Repsol’s old stake in the energy company was snatched by the government. But now YPF is touting itself as a well run, commercial operation. It wants to borrow in international markets and needs partners like Exxon and Chevron. They have a chance to strike decent deals.
Angola’s rare oil success isn’t fixing governance 30 Aug 2012 Unlike, say, Venezuela or Mexico, the African nation has doubled oil output since 2001. That has boosted GDP per capita, but corruption and human rights abuses are holding the economy back. Sadly for Angolans, the likely re-election of the 33-year president won’t change that.
Arctic debacle underlines Gazprom’s weaknesses 30 Aug 2012 The Russian energy giant has shelved plans to develop the giant Shtokman offshore field, all-but-killed by cost overruns and the shale gas revolution. The demise of the flagship development is a sign of the company’s waning strategic heft. Reversing that may prove impossible.
Obama’s gas guzzler curbs trump drill baby drill 29 Aug 2012 The White House is doubling fuel efficiency for U.S. vehicles. That’s more likely to cut drivers’ costs and reduce dependence on foreign oil than Romney’s crude exploration plan. But hiking the gas tax would be the smartest way to tackle America’s overreliance on Black Gold.
Refinery explosion emblematic of Hugo Chavez curse 27 Aug 2012 The blast hobbled PDVSA’s largest plant. The Venezuelan leader’s policy of placing loyalty before commercial prowess may not have caused the accident. But it has warped the nation’s business ethos. Recent moves like saddling the oil company with a weak partner make matters worse.
Exxon aims for smarter Russia bet as rivals fold 23 Aug 2012 ConocoPhillips’ exit from a JV means its 20-year Russian adventure is all but over. BP has had to retreat from some of its forays too. While making money, neither built the kind of business they hoped for. Armed with a few lessons and its world-beating clout, Exxon may do better.
China’s oil giant may need pricey Canadian boost 21 Aug 2012 CNOOC’s $15 bln tilt at Canada’s Nexen seems an expensive distraction, especially since the Chinese oil major has cut its dividend, has flat output and rising costs. Yet CNOOC needs a booster. Nexen’s drilling expertise could help it squeeze more out of its domestic business.