Booming U.S. oil is rare advert for big capitalism 6 Jun 2012 America now boasts the world’s fastest-rising oil production outside OPEC. That leaves Brazil’s growth trailing, while output in Mexico is falling. With banks in particular in the doghouse, it’s a reminder that private enterprises seize opportunities better than governments.
Latam’s new oil king dons large and heavy crown 4 Jun 2012 Colombia’s Ecopetrol is jockeying to surpass Brazil’s Petrobras as the region’s biggest oil producer by market value. Solid management has lured billions in capital away from rivals in meddling nearby states. But Ecopetrol may struggle to live up to the high hopes for its reign.
Chesapeake board ups governance; now to govern CEO 4 Jun 2012 Finally, investors including Carl Icahn will get to pick four directors at the beleaguered U.S. gas firm, and all board seats will be less secure than before. But even vigorous directors have their work cut out reining in Aubrey McClendon, the company’s founder and 23-year boss.
Exxon tweaks chemistry to hedge U.S. gas exposure 1 Jun 2012 The energy giant bet heavily on gas with its $31 bln purchase of XTO. With domestic prices still sagging two years on, the company is set to turn some of its gas into more lucrative chemicals for export. Exxon’s new plant may even do rivals a favor by shrinking the glut of gas.
Oil’s fall below $100 won’t make economy rise 1 Jun 2012 The 18 percent decline in the price of crude in May shows that when fear rises to hysterical levels even easy money cannot support all asset prices. In theory, cheaper oil should stimulate importers’ economies. In practice, the benefits will be lost in the financial morass.
BP’s Russian exit would lead to existential limbo 1 Jun 2012 The UK oil major could turn grief into $20-$30 bln of cash if a deal materialises from the approaches for its half of the TNK-BP joint venture. But BP would then need to find new growth assets. And that could mean other difficult partners in challenging jurisdictions.
Exxon’s fracking gag makes Chesapeake look good 30 May 2012 That’s a rare feat. The troubled gas firm is infamously opaque. But Chesapeake’s openness on the risks of fracking puts larger rivals like Exxon to shame. After another large minority vote from investors for more information, Big Oil should follow its troubled cousin’s lead.
Chesapeake may need to sacrifice more than assets 29 May 2012 The embattled U.S. gas producer is already dispensing with energy fields to raise cash. Now investors, including uppity Carl Icahn, want directors ousted. Replacing two up for election without Chesapeake’s OK is near impossible. But resistance is counterproductive at this stage.
BP’s latest Russian spat spells more aggro 28 May 2012 The UK oil major is at odds with its oligarch partners in TNK-BP after one of them quit as the joint venture’s CEO. Mikhail Fridman’s exit could be a passing storm. But as BP’s force in Russia declines, such drama is more likely to presage a messy endgame to the partnership.
Indian oil producers may be due a windfall 28 May 2012 Delhi presently subsidises refiners, and forces state-owned oil companies to bear part of the cost. Growing deficits mean that can’t continue. A logical move is for the government to let the price of diesel rise, which could mean a boost for the likes of Oil and Natural Gas Corp.
Chesapeake could use a fresh start in a new home 24 May 2012 The embattled U.S. gas producer faces a shareholder vote to reincorporate in Delaware. The board’s argument that Oklahoma’s stiff takeover defenses better serve shareholders is a stretch. Chesapeake needs a governance overhaul. A new legal address would be a good first step.
Petrol hike pumps hope for deflated India 24 May 2012 It’s a small start, which will be meaningless unless followed with bolder action to cut subsidies and reform the economy. But the direction of travel is right and, if it proves more than a false dawn, it will help India rediscover its credentials as a high growth economy.
Did Chesapeake miss Enron lessons? 22 May 2012 There have been no allegations of fraud. But the embattled U.S. natural gas producer’s vast trading operation, fondness for complicated holdings and relationships, and corporate generosity are among the traits that call to mind some of the defunct energy giant’s flaws.
India’s slipping on oil as well as Greece 17 May 2012 It’s easy to blame the EU for India’s woes. But politicians shouldn’t fall into the Greek trap of knowing what’s good for them but failing to act. The currency’s decline should be a trigger for government action. Popular but expensive fuel subsidies are the place to start.
Exxon attacks straw man to defend CEO’s pay 16 May 2012 The oil giant is trying to calm shareholder anger over Rex Tillerson’s $35 mln bonanza before the say-on-pay vote at its AGM. Exxon argues that its long-term goals obviate the need for annual targets. But that just sounds like an excuse for C-suite largesse.
Goldman extracts pound of flesh from Chesapeake 15 May 2012 The troubled U.S. gas company has received the Wall Street firm’s expensive imprimatur as a lender on its now upsized $4 bln loan. At an onerous rate of interest, the cash buys Chesapeake time to finish asset sales. Barring an outright default, Goldman has the best of the deal.
China has strongest hand in Philippine stand-off 15 May 2012 Manila protests China’s claims on disputed islands, but its economic position is weak. China is a big export customer, and has the money and tourists Manila needs to dig mines and fill new casinos. Whoever owns the South China Sea’s energy riches, China will be the biggest buyer.
Chesapeake’s evasive tactics compound crisis 14 May 2012 After securing $3 bln of emergency funds, the gas producer’s CFO couldn’t say how much of its credit line had been drawn. Chesapeake was also vague with investors about the loan’s net proceeds and terms. Such guile doesn’t inspire confidence that a cash crunch has been avoided.
Petrobras earnings delay excuse is cause for worry 11 May 2012 It’s bad enough the Brazilian oil giant was going to report crummy results on Friday. Delaying them until next week over a “scheduling problem” is unnerving. Investors know Petrobras is grappling with production issues. Adding shambolic governance to the mix is most unwelcome.
Qatar takes Shell friendship to next level 11 May 2012 Adding a stake in the UK oil major to holdings in Total, Xstrata and European Goldfields adds a degree of diversification to the emirate’s resource exposure. But strategic ties are strong. Qatar is home to two Shell projects. Formalising the relationship is a natural next step.