Energy

Capital Calls: Rio Tinto, Grocery delivery M&A

9 Dec 2022

Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.

Exxon and Chevron give in a little to temptation

8 Dec 2022

The two oil giants plan to increase investment in shale next year, to a combined $39 bln, and reduce carbon intensity. Raising output and growing sustainability could even boost capital returns to investors. The worry is that the industry regains its taste for profligacy.

Saboteurs add new twist to U.S. outage problem

5 Dec 2022

Over 40,000 customers were plunged into blackouts out after attacks on two U.S. substations. Vandalism on the power grid is costly to secure against, but utilities continue to face much larger vulnerabilities. The threat from storms is orders of magnitude larger and growing.

Eni’s $6 bln Neptune swoop will be a haggle-fest

1 Dec 2022

Italy’s $52 bln oil major may bid for the private equity-backed gas producer. Windfall tax and recession risks make the $10 bln price tag from last year’s mooted IPO unlikely. But Eni’s scope for synergies and need to pivot to gas give owners like CVC scope to hold out for more.

Venezuelan oil offers little to U.S. or Chevron

28 Nov 2022

The Biden administration eased sanctions, allowing the $355 bln fossil fuel giant to access reserves. But decrepit fields mean exports could be under 1% of U.S. demand, and the dirty fuel has limited appeal. Plus Chevron is printing money and doesn’t need Venezuelan oil.

EU gas cap is indirect signal to cut power demand

23 Nov 2022

The bloc’s proposed brake on natural gas prices at 275 euros per megawatt hour is a fig leaf. The ceiling is so high and with such stringent conditions that it may never be activated. Its main use may be to remind EU states their best option is to use energy more efficiently.

Debt woes will restrain Enel’s global ambitions

22 Nov 2022

CEO Francesco Starace vowed to cut the 52 bln euro utility’s net debt by 21 bln euros, amid spiralling gas costs. Focusing on fewer regions looks sensible and may shield investments and dividends. But it will hinder Enel’s efforts to stay one of the top energy transition winners.

Energy crises speed up the green transition

22 Nov 2022

In 2022, war and power shortages have led to more fossil fuel use. But they also act as a catalyst for the rollout of renewable energy. In this edition of The Exchange podcast, ex-Snam boss Marco Alverà tells George Hay how Europe’s leaders can capitalise on this dynamic.

The world can harness trade to save the planet

21 Nov 2022

Trade is a major cause of global warming. The solution is to tax commerce in carbon-intensive goods and remove tariffs on clean ones, to support low-carbon technologies, and to do all this fairly. It’s a priority for next year’s COP28 conference in Dubai, says Hugo Dixon.

Capital Calls: ABB, Italian budget

21 Nov 2022

Concise views on global finance: The $57 bln Swiss engineering group is selling a minority stake in its car charging unit, as a fallback to volatile IPO markets; premier Giorgia Meloni’s hard-right government targets a budget deficit of 4.5% of GDP in 2023.

COP27 deal is a blessing in a very good disguise

21 Nov 2022

The premier forum for fighting climate change ended in Egypt with a largely inadequate agreement to reduce global greenhouse gas emissions. But it did feature a small show of goodwill by rich countries. That might incentivise the big emitters of tomorrow to up their game.

Indonesia’s green step not yet a leap for mankind

18 Nov 2022

Jakarta will get $20 bln of overseas public and private cash to help it decarbonise. The deal struck at the COP27 summit paves the way to channel capital to poor countries at the required scale. But big foreign transfers are fraught. Lenders have plenty of reason to hesitate.

COP28 may make up for COP27’s shortcomings

17 Nov 2022

The global climate meeting has mostly failed to lure the same corporate big hitters as Glasgow did last year. In this Viewsroom podcast, Breakingviews columnists discuss how even if the gathering in Egypt’s Sharm El-Sheikh yields little progress, 2023 in the UAE could be better.

The shafts of light in a dark, dark world

14 Nov 2022

As the G20 kicks off, there are many negatives: a frying planet, economic crisis, conflict in Ukraine, and maybe a cold war with China. But there are positives too, says Hugo Dixon: Putin is losing, autocrats are struggling, and carbon emissions may peak earlier than expected.

Don’t dump on U.S. coal plan. Make it better!

11 Nov 2022

Sceptics fear an American plan to use voluntary carbon markets to accelerate the energy transition in poor countries, unveiled at COP27, could amount to greenwashing. But done properly, it could help developing markets close down coal plants, a major source of pollution.

Recession-shy investors can turn to capital cycle

10 Nov 2022

As the world braces for an economic downturn, commodities have taken a hit. But oil and mining giants have been cutting investment for almost a decade, says Edward Chancellor. Supply shortages could allow these companies to buck the market downturn.

Capital Calls: Centrica

10 Nov 2022

Concise views on global finance: The 5 bln pound UK energy group launches a 250 mln pound buyback despite a struggling supply business and windfall tax threats.

Brookfield crafts compelling Plan B climate deal

10 Nov 2022

The Canadian investor is leading a $12 bln bid to break up Origin and will spend a similar amount itself to speed up the Australian target’s energy transition. It’s a trickier buy than a failed move on rival AGL. If it succeeds, it will offer a model for other consortiums.

Capital Calls: Cross-border M&A, Riches to rugs

9 Nov 2022

Concise views on global finance: The market reaction to U.S.-based Chart Industries’ $4.4 bln deal to buy Scotland’s Howden reinforces the idea that it’s a bad time to shop overseas, while Peloton’s founders are shifting gears with a new bespoke carpet business.

Capital Calls: Uniper

3 Nov 2022

Concise views on global finance: The German utility’s 40 bln euro loss for the first nine months of 2022 has turned its equity negative and implies a much larger bailout.