CNOOC pulls out stops to make Nexen bid palatable 23 Jul 2012 The Chinese oil giant is paying $15.1 bln for the Canadian producer, a whopping 61 pct premium. The deal also comes with sweeteners to placate protectionists, including CNOOC promises of a secondary HQ in Calgary and a listing in Toronto. It will be hard for Ottawa to say no.
GE’s carve-up efforts remain half-hearted 20 Jul 2012 The $210 bln conglomerate is hacking its energy arm into three after doing the same with another division in 2010. Cost savings would be worth only some $300 mln. Maybe CEO Jeff Immelt, who has presided over a halving of GE’s share value, will warm to a breakup on a bigger scale.
Chevron doubles down on Chavez staying power 20 Jul 2012 Venezuela’s bond yields have gyrated with investors’ changing views of the strongman’s cancer survival odds. But Chevron’s $2 bln loan to the state oil giant is a clear bet on Chavez’s re-election and survival. His shadow may darken the nation’s economic outlook for a while yet.
Repsol making the best of a bad situation 20 Jul 2012 The Spanish oil major is shedding non-essential assets and striking clever financing deals in the wake of the YPF fiasco. Selling cash-cow liquefied natural gas assets could raise up to 3 bln euros to plow into upstream growth. It’s not a bad response to tricky circumstances.
Russian oil needs more than Putin’s tax tweak 18 Jul 2012 The oil reserves of Russia are twice those of the U.S. Yet output is only rising half as fast. A penalising tax code that discourages drilling for harder-to-reach oil is to blame. Making exceptions for the likes of Exxon is no substitute for bold reform.
Cove game could end with a knockout 16 Jul 2012 The five-month battle for Mozambique gas explorer Cove Energy is coming to a head. Big new finds have increased the stakes in the bidding war between Shell and Thailand’s PTT. PTT’s May offer of $1.9 billion is the highest on the table. But the UK major can almost certainly top it.
Divided ConocoPhillips may yet win over investors 13 Jul 2012 It has been a year since CEO Jim Mulva vowed to unlock value by splitting exploration from refining. His timing was off, though. Jittery shareholders seem to want the safety of diverse income streams. Separated, the shares lag conglomerate peers. But Mulva should be vindicated.
Norway strike challenges crude complacency 9 Jul 2012 Usually the Nordic country barely figures on the list of risks to crude supplies. But striking workers and a threatened production shutdown have contributed to Brent’s march back towards $100 a barrel. It’s a reminder of oil’s ability to surprise, even when demand is weak.
OPEC spendthrifts can’t blame cheap oil for woes 6 Jul 2012 Venezuela and Iran want an emergency cartel meeting, claiming overproduction is depressing prices. But despite the recent fall, crude is, at $98 a barrel, near its highest level in decades. Only profligacy prevents OPEC nations balancing their budgets at that price.
Brazil’s richest man overpromises, underdelivers 28 Jun 2012 Billionaire Eike Batista is swiftly falling from favor. His flagship oil company OGX lost 25 pct of its value Wednesday after massively cutting output expectations. Batista is a savvy salesman and wheeler-dealer but his failed promises are building up rapidly. Investors beware.
Oil markets could snap at the shorts 26 Jun 2012 After Brent’s rapid collapse from $126 to $90 a barrel, oil traders appear to be dismissing Iran risks and China’s ability to stimulate growth. And today’s picture of excessive Saudi production and sputtering global demand could change by year-end if Europe muddles through.
Chesapeake leaves investors wondering what’s next 25 Jun 2012 The U.S. gas producer is feverishly trying to dispel a cowboy reputation, including by shaking up the board. But emails suggesting Chesapeake colluded to buy land on the cheap are a setback. With all that’s happened so far, it’s also hard to believe this scandal will be the last.
Chesapeake gets short-term gravitas at the top 21 Jun 2012 At 73, former Conoco boss Archie Dunham can’t have plans to stick around and unseat Aubrey McClendon from the energy empire he has built. So investors are disappointed. But he does have his legacy to protect and the god-given heft to keep Chesapeake’s reckless founder in line.
Pemex can’t shake stigma of state-run cheapskate 20 Jun 2012 The Mexican oil company just held a second disappointing wells auction. But investors lapped up its $1.75 bln sale of 32-year debt. The contrast shows that potential partners still have little faith that Pemex can be more than a cash cow for creditors and its government owner.
Jilted Air Products gets only a consolation prize 19 Jun 2012 Since the U.S. hydrogen producer’s hostile bid for Airgas failed last year, it has lagged rivals. Its former prey’s dramatic outperformance exposes the $5.8 bln offer as too stingy. A smaller deal in Chile may help Air Products revive growth but is a poor Airgas substitute.
Exxon’s Poland exit raises frackers’ PR challenge 19 Jun 2012 Poland was unusually receptive to the controversial drilling technique, but the U.S. major thinks the prospects there aren’t bright enough. It’s leaving after two disappointing wells. Europe’s would-be frackers must now find richer fields, and persuade more hostile governments.
Petrobras risks becoming too much like Pemex 14 Jun 2012 The $120 bln Brazilian oil giant dialed down output goals to an underwhelming level. Lower production is symptomatic of state meddling, as Petrobras diverts funds to money-losing areas like refining. Shareholders should beware the growing similarities to Mexico’s energy king.
Oil plunge offers crude contrarians a foothold 14 Jun 2012 The price of Brent has fallen by nearly a quarter in two months. It could fall further still in the event of ’Eurogeddon’. But with investors at their most bearish on commodities since 2009 and Iran tensions festering in the background, contrarians must be tempted.
OPEC can’t afford to give residents cheap oil 13 Jun 2012 It may sound like a cheap perk to appease the populace. But the practice costs OPEC members $120 bln in lost revenue, and encourages wasteful consumption. Both exporters and importers would ultimately benefit from lower subsidies. The politics are tricky, though.
Iran’s oil sanctions are just beginning to hurt 13 Jun 2012 The Islamic Republic’s oil revenue may have already fallen by one third on the back of declining exports and prices. With U.S. sanctions set to tighten and China’s apparent readiness to comply, Iran’s finances are thrown into the red.