Commodities

Saudi’s Aramco plan B is too clever by half

27 Jul 2018

With the oil giant’s listing stalled, Riyadh wants to lever it up to buy a stake in chemicals group SABIC. It shouldn’t overburden Aramco, and offers a roundabout way of getting money to the state. But compared to an IPO it’s riskier, and does less to boost Saudi capital markets.

BP takes worthwhile gamble with shale deal

27 Jul 2018

The $10.5 bln that the oil major is paying for BHP’s U.S. shale assets is a full price and allows the miner to finally extricate itself from an expensive mistake. But BP is plugging a strategic gap and can easily cut costs. That makes the price appear more reasonable.

Conoco escapes squeeze on Big Oil’s golden goose

26 Jul 2018

Infrastructure bottlenecks are depressing oil prices in America’s resource-rich Permian Basin. New pipelines should be running by next year if labor and steel problems don’t cause delays. While the $84 bln Conoco’s U.S. business is holding up, others may not be so fortunate.

Indian tycoon winner of Trump-China metals scrap

26 Jul 2018

Hindalco is snagging aluminium producer Aleris for $2.6 bln after CFIUS concerns torpedoed a previous bid from a Chinese buyer. Hindalco’s U.S. arm Novelis is paying more, but the numbers stack up. Mogul Kumar Mangalam Birla is smartly taking advantage of the trade war for now.

Shell and Total can hand investors even more cash

26 Jul 2018

The Anglo-Dutch major has begun a $25 bln share buyback, months after its French peer. That may signal Shell lacks growth ideas, yet investing in new oil projects and green energy is also risky. Sharing windfalls from high oil prices with shareholders is the lesser of the evils.

Trump hardball may still become Iran oil softball

23 Jul 2018

The president’s Twitter attack on Tehran counterpart Hassan Rouhani doesn’t sound great for importers of Iranian crude. Yet U.S. sanctions policy is volatile - just ask Russia’s Rusal. Another Trump goal - low petrol prices - implies Iranian exports will still be tolerated.

Aramco’s downstream diversion solves few problems

19 Jul 2018

Buying a stake in petrochemical maker SABIC would enable the Saudi oil giant to diversify its business. But it complicates the government’s plans to open state companies to private capital. And the holding is too small to pump up Aramco’s valuation in an initial public offering.

Viewsroom: Trump’s Supreme Court pick

12 Jul 2018

The U.S. president has chosen a friend of big business in Brett Kavanaugh. But he faces bigger questions from Senate democrats about executive power. Plus: Commodity giant Glencore faces mounting risks in Washington, and what’s behind the Chinese yuan’s downward slide.

U.S. salvo at Glencore has unintended consequences

12 Jul 2018

A request for details on anti-corruption practices wiped more than $6 bln off the commodities giant's value in a week, raising questions over its future. Yet action is not without a sting for Washington too - if it leaves China even more dominant in resource-rich trouble spots.

Aramco fail hits Saudi ambition more than coffers

10 Jul 2018

If the state oil firm's IPO doesn't fly, Crown Prince Mohammed bin Salman will be $100 bln short. That's huge, but higher crude prices will help the budget and Riyadh can borrow too. The bigger problem is finding other ways to lure the foreign capital his 2030 vision depends on.

India’s Cairn Energy fire sale is short-sighted

9 Jul 2018

Tax authorities have sold part of a stake in Vedanta Limited seized from the UK company in a $1.3 bln tax dispute, weeks before the pair go to arbitration. India only pockets $216 mln, half what the shares were worth at the start of the year. The timing and the logic look flawed.

CEO exit is game changer for ThyssenKrupp

6 Jul 2018

Heinrich Hiesinger offered to quit the German conglomerate days after clinching an underwhelming steel JV with Tata. His long tenure and advocacy of the group’s conglomerate structure made him ill-suited to the action ThyssenKrupp needs. His replacement should be more radical.

Glencore’s investor sunshine aided by U.S. cloud

5 Jul 2018

A $1 bln buyback will please investors wanting to see the commodities giant’s stronger balance sheet reflected in cash goodies. Yet Glencore is doing it as U.S. authorities demand details on anti-corruption compliance. Its usual gung-ho dealmaking may need to take a back seat.

High oil prices are as American as apple pie

4 Jul 2018

President Trump’s sniping at OPEC seems to be led by concerns about spiraling petrol pump prices. But these aren’t high enough to stop drivers from hitting the road. And while the U.S. remains a net oil importer, surging domestic production will also help the economy.

Agarwal’s Anglo American carve-up looks a stretch

4 Jul 2018

The Indian billionaire is mulling a merger of his Vedanta empire with the global miner’s South African arm, Mint reports. The valuation case for a breakup is less compelling than it was. If Agarwal acts, it looks more logical to target the miner’s non-South African assets.

Glencore’s Washington risks are starting to add up

3 Jul 2018

The resources giant’s shares fell 12 pct after the U.S. asked for details of anti-corruption compliance in Nigeria, Congo and Venezuela. Glencore’s geographies mean this is always a danger. But a June settlement with U.S-sanctioned Dan Gertler won’t have endeared it to Uncle Sam.

Vedanta digs just deep enough to leave London

2 Jul 2018

Chairman Anil Agarwal’s offer of a 28 pct premium for the mining group’s 2.3 bln pound UK unit is probably enough for investors spooked by deadly protests. They can invest directly in the Indian operations anyway. And a simpler structure paves the way for more dealmaking.

Steel pact lets Thyssen/Tata tackle wider problems

2 Jul 2018

Tweaking the terms of their September joint venture gives the German steelmaker a bigger share of a future IPO. It could have driven a harder bargain, but Tata had limited wiggle room. Besides, ThyssenKrupp needed a deal to kickstart its own much-needed overhaul.

China’s homegrown shale is worth the bother

27 Jun 2018

The People’s Republic produced a fraction of U.S. shale gas output in 2017. Terrain issues, deep wells and limited data explain why, yet better domestic technology and state support are pushing production up. With trade tensions rising, Beijing's costly hedge looks sensible.

Saudis’ OPEC tightrope has trade war safety net

22 Jun 2018

The kingdom’s desire for oil output hikes faces pushback from Iran, its usual antagonist. Even if it strikes a deal in Vienna on Friday, lost supply from Venezuela may still push up prices. Riyadh’s saving grace could come if a trade war between the U.S. and China saps demand.