YPF seizure follows long, sad Argentine tradition 16 Apr 2012 One of the world’s first state-controlled oil firms is being reclaimed. Such nationalistic tendencies stretch back nearly a century. Juan Peron, founder of President Fernandez’s party, also grabbed many businesses in the 1940s. But commodity prices don’t stay high forever.
Big Oil chief payouts flow too freely 16 Apr 2012 Rex Tillerson and John Watson, the respective bosses of Exxon and Chevron, earned $60 mln between them last year after big pay hikes. But Exxon’s lead is shrinking and Chevron’s newish CEO can’t take credit for closing the gap. Rising oil prices don’t make such packages deserved.
Resource nationalism can have a bright side 13 Apr 2012 A rumored nationalisation of Argentina’s biggest oil firm still hasn’t materialised. Resource nationalism is a perennial problem, though not all of it is as counter-productive as Buenos Aires’ harassment of YPF. Shareholders suffer. Production and market stability don’t have to.
Green energy may yet survive poison of cheap gas 12 Apr 2012 The collapse of U.S. natural gas prices below $2 is a fresh blow to solar just as another industry IPO is pulled. But don’t write it off. Solar is getting cheaper, too, and providers can set costs for decades. Gas, which America may soon be exporting, offers no such guarantee.
Euro zone powerless to avoid big oil divide 10 Apr 2012 Some euro members are more unequal than others in the face of rising oil prices. The hit to growth is greater in enfeebled and touristy countries like Greece, Ireland or Italy than in richer ones like Germany. And there’s little governments can do to alleviate the pain.
New image top priority for Conoco refining spinoff 9 Apr 2012 Phillips 66, the $30 bln-odd firm set to separate from the U.S. oil major on May 1, wants to be something else. Refiners get low valuations next to racier pipeline and chemical firms. But with 84 pct of Phillips’ capital tied up in refining, investors will take some persuasion.
Delta would be crackers to fly into refining 5 Apr 2012 Pricey fuel is the airline’s nemesis. But buying Conoco’s idled plant would increase Delta’s risk. It wouldn’t hedge volatile crude prices and would leave the company exposed to the financial challenges of running a refinery. There are better ways for Delta to cut its costs.
YPF folly could end up costing Argentina double 5 Apr 2012 If President Cristina Fernandez makes a grab for the country’s oil group, it’s unclear how she would reimburse majority owner Repsol. But even if the state managed to fork out a “fair” price, the cost of scaring off foreign investors would exceed any gain from nationalisation.
BP has yet to deliver its positive Macondo legacy 2 Apr 2012 The Gulf of Mexico disaster prompted soul-searching and a wide-ranging review of BP’s sprawling portfolio. The pledge was to divest low-return assets and focus on its core competence in exploration. But two years on and it’s clear the strategic renewal is proving a long slog.
Oil billionaire shows how to handle M&A conflicts 29 Mar 2012 Continental CEO Harold Hamm has persuaded the firm to buy another of his companies, Wheatland. That’s prime territory for stiffing shareholders. But both executives and the board appear to have played it fair. It’s a good blueprint for other firms, and Wall Street, to follow.
Sanctions could cost Iran $50 bln 29 Mar 2012 Top buyers of Iranian crude are cutting back and the government may soon have to offer discounts to shift supplies. The higher crude price would only partly counter these factors. Tehran could lose half its oil revenue and soon face the pinch.
North Sea blowout hardly justifies Total meltdown 28 Mar 2012 An out-of-control gas well off the UK coast has wiped 8.5 pct off the French oil major’s share price in three days. After BP, investors have acute fears about runaway deep sea disasters. But the reaction so far looks excessive.
U.S. energy debate has little to do with economics 27 Mar 2012 President Obama’s call to end big oil’s tax credits is mere political theater. Another $4 bln in tariffs for the industry won’t cure the deficit - and these firms do pay a fair whack already. But the counterargument that scrapping them will drive up gas prices is just as dubious.
Pricey exploration means dear oil is here to stay 27 Mar 2012 Handouts to restive citizens during the Arab Spring pushed up the break-even oil price for Middle Eastern states. Oil producers face a similar problem. The fact that the cost of extracting oil has tripled over the decade for private explorers is bad news for gas guzzlers.
Brazilian billionaire buys time from Gulf 26 Mar 2012 Eike Batista may be the richest man in Latin America’s biggest economy, but he runs a cash-hungry empire. His sprawling oil and mining group is in its infancy. The $2 bln infusion of patient Abu Dhabi money should help Batista try to make good on his promise.
Repsol shares betray leveraged Latam risks 23 Mar 2012 Shares in the Spanish oil major have lost more than 10 pct since troubles began in Argentina with its listed subsidiary, YPF. This looks overdone compared to YPF’s own market fall. But Repsol’s exposure to Argentina is bigger than it looks.
Chevron’s criminal scrape may backfire on Brazil 21 Mar 2012 A prosecutor in Brazil is chasing the oil titan for a spill about 0.1 percent the size of BP’s Gulf gusher. This over-reaction may reflect one lawyer’s ambitions. Still the fact that Petrobras has escaped such punishment will add to worries that outsiders face a double standard.
Saudi words won’t ease pressure on U.S. fuel prices 21 Mar 2012 Despite its reassurances, Saudi Arabia has imperfect options to prevent U.S. fuel prices from reaching risky levels seven months before the presidential elections. Sanctions on Iran, meanwhile, allow Riyadh to benefit from both strong oil prices and high production.
Tapping oil stockpiles could turn into bad habit 15 Mar 2012 With U.S. fuel prices near the politically risky $4-a-gallon, Britain and the United States may release strategic reserves. It would be the second time in as many years authorities have done so. Emergency stashes should be for real supply emergencies. Iran isn’t causing one yet.
Qatar forms a taste for foreign strategic assets 15 Mar 2012 After eyeing European aerospace and defence firm EADS, Qatar has snapped up a $2.6 bln stake in French oil major Total. That is a poor diversification of the Gulf state’s hydrocarbon wealth. But it might be an effective way for Qatar to shore up influence with its gas customers.