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.
U.S. energy nationalism soft spot could be gas 8 Mar 2012 Seven years after jingoism prevented CNOOC from buying Unocal, Chinese companies remain on the prowl. So far, they have been content with joint ventures. And high oil prices would make acquisitions difficult now anyway. But foreign buyers may find America less protective of gas.
Exxon fears hammer home risks of Kurdish oil rush 6 Mar 2012 Speculation the U.S. major may not enter Iraqi Kurdistan after all has pummeled shares in the region’s oil companies, including a 24 pct drop in Gulf Keystone. Exxon was meant to break the political impasse in Baghdad, without which big energy bets in the region may be off.
ECB cash palliates crisis but drives up oil price 5 Mar 2012 The euro zone’s crisis has been eased by a trillion euros of financing from the European Central Bank. But this easy money comes with major risks. It has helped drive up the oil price, indirectly funds deficits and, as Germany fears, could bring inflation and a debased currency.
BP’s big opponents may blink next 5 Mar 2012 The oil major’s Gulf of Mexico deal neutralises one set of plaintiffs – with a modest increase in expected payments. And if the injured parties are happy, U.S. federal and state governments are more likely to agree to fines which BP can bear without too much more pain.
India should hold its nerve on stock auctions 2 Mar 2012 New initiatives don’t always succeed first time. The Indian government’s auction of shares in ONGC, the oil and gas group, could have flopped had it not been for last-minute intervention. But as long as Delhi learns, auctions can still play a valuable role in privatisations.
Shell can afford to let Cove Energy go 29 Feb 2012 Gas-hungry Asian rivals are complicating the oil major’s attempt to buy 8.5 percent of a giant African gas field. Shell can probably justify paying more, but has no need to get into a bidding war. Even if Cove gets away, there should be other opportunities to participate in the field.
India’s auction tack bodes well for privatisation 29 Feb 2012 Questions remain about retail participation and whether New Delhi is genuinely convinced by the merits of privatisation. But the sale of shares in the state-controlled oil and gas company by auction is a new departure in India that promises to be effective and efficient.
Vedanta restructuring may need a rejig 28 Feb 2012 The India-focused FTSE 100 mining group is simplifying itself. There are sound commercial gains to be made in the process, but doubts linger about whether the assets are being transferred at equitable values. To get the deal done, Indian investors may need a bit more of the pie.
Investors ill-served by crude accounting standards 27 Feb 2012 Oil, that is. Divining how much explorers have discovered matters greatly to shareholders. Yet they must choose between two equally unreliable figures. Estimates based on SEC rules gyrate wildly with energy prices, while company data are too opaque. Shareholders deserve better.
Browne’s North Sea idea is more than nostalgic 27 Feb 2012 Buying into Fairfield Energy would befit the ex-BP boss, who managed a North Sea oil field in the 1980s. Yet there is sound commercial logic too. Oil prices, and opportunities to scoop up oil majors’ unwanted acreage, have increased since Fairfield pulled its IPO in 2010.
Apollo’s $7 bln bet won’t get gas from leverage 27 Feb 2012 The buyout firm and its partners are writing a chunky 40 pct equity check for El Paso’s E&P business. With energy prices volatile, lenders are rightly cautious. But without the usual debt juice, the best hope of a punchy investment return is a big upturn in gas prices.
Drilling alone won’t fulfil cheap U.S. oil dreams 24 Feb 2012 By expanding offshore drilling, GOP presidential contenders claim they can bring gasoline prices back to earth. With the US pumping only 9 pct of global oil, its leverage on supply is modest. But the biggest consumer can affect demand. That requires frank talk about conservation.
Shell pays up for a foothold in Mozambique gas 22 Feb 2012 The oil giant has offered $1.6 bln for gas explorer Cove Energy – a 70 pct premium but loose change for Shell. The assets are attractive and Shell has the know-how to exploit them. If Asian gas prices stay high and exploration projects deliver, the toppy price could be worth it.
BP’s Deepwater catharsis finally on the horizon 22 Feb 2012 A minority partner’s deal with the U.S. government is a promising sign ahead of a critical civil trial opening on Feb. 27. Extreme financial penalties look priced into BP stock whatever the verdict. So too is a big management discount. There’s lots of upside if BP isn’t thwacked, and its board restores credibility.