Energy

BP is case study in global windfall-tax quandary

1 Nov 2022

The $100 bln oil major wants to produce more green energy and less crude. Yet a British windfall tax risks pushing it in the opposite direction. A better levy design would hit outsized profit in both fossil fuels and renewables, while still incentivising investment in the latter.

Climate fight’s main event battles sophomore slump

1 Nov 2022

COP26 put climate change centre stage in 2021, but this year war and energy crises have distracted attention. In this episode of The Exchange, the United Nations’ key COP27 players Mahmoud Mohieldin and Nigel Topping tell George Hay why the event could still make a splash.

Europe’s pain will be ultimately worth it

31 Oct 2022

The European Union faces a tough period as the energy crisis bites and debt troubles return. But the bloc could have the world’s cheapest and cleanest energy by the mid-2030s and it will probably emerge stronger geopolitically, says Hugo Dixon.

New Shell boss has scope for a green power splurge

27 Oct 2022

The $190 bln oil major could double net income to $40 bln in 2022. Rather than launching more buybacks, incoming CEO Wael Sawan could eye up a mid-sized European renewables player like $19 bln SSE. It would speed Shell’s green energy mission without messing up its finances.

Energy crisis gives beermakers a lasting hangover

26 Oct 2022

Heineken’s shares fell 10% after reporting weaker-than-expected sales. Inflation is eroding punters’ disposable income, making it harder for brewers to raise prices like in previous crises. Soaring costs for fuel and wheat, which bite next year, pose a further threat to margins.

Italy’s new boss is missing a trick on tax evasion

24 Oct 2022

Public debt at 147% of GDP and a slowing economy limit Prime Minister Giorgia Meloni’s scope to curb an energy crisis and keep spending promises. Tackling endemic tax evasion would give her more fiscal ammunition. Yet promoting the use of cash and tax amnesties will not help.

Time for Europe to tame its energy cravings

19 Oct 2022

After paying through the nose to fill its gas storage reserves to 92%, the bloc is seeking to secure more affordable fuel. Measures like curbing price volatility, club purchases or flexible caps will be no panacea. While supply is tight, curbing demand is the key.

Capital Calls: Coal’s fear-then-greed trade

19 Oct 2022

Concise views on global finance: Shares of Aussie coal miners fell on production disruptions from floods, only to quickly rise as investors bet on tighter supplies and higher prices.

Europe’s energy crisis nears winter of discontent

18 Oct 2022

Germany, Italy and others have scrambled to replace Russian gas and pipeline attacks have become a concern. The Oxford Institute for Energy Studies’ Jack Sharples tells The Exchange podcast Europe must learn to live with less power. Next year may be even more challenging.

Massive fiscal U-turn leaves UK in political funk

17 Oct 2022

New finance minister Jeremy Hunt soothed investors by reversing most of Prime Minister Liz Truss’s “growth plan” and cutting short her generous energy subsidies. But he still needs extra tax hikes or spending cuts. Persuading parliament to support the switch will be a challenge.

Total’s Russia foot-dragging is investor problem

18 Oct 2022

The French energy giant owns a stake in gas group Novatek, and is in theory entitled to a $430 mln dividend. CEO Patrick Pouyanné won’t say whether he’s selling. He may hope that long-held Kremlin ties can secure a clean exit, but the uncertainty is a shareholder concern.

Sovereign debt greens yet net-zero pledges darken

13 Oct 2022

Saudi Arabia’s wealth fund is the latest public body to issue securities to fund renewable assets. Strong buyer demand and the chance to flaunt action on climate change explain the boom. Yet national decarbonisation targets remain weak, and green bonds do little to improve them.

How West can mobilise trillions to help save Earth

10 Oct 2022

On top of stopping global warming, rich nations have geopolitical reasons to help the countries in the Global South transition from fossil fuels. America’s call for the World Bank to focus more on global needs like climate change is a step in the right direction, says Hugo Dixon.

Green hydrogen revolution risks dying of thirst

5 Oct 2022

Backers make three miscalculations about the gas’ key input, water: that they won’t need much, that it’s cheap, and that desalination is a breeze. Some $700 bln is needed for projects from Australia to Saudi to Europe, but water scarcity means many will be left high and dry.

HSBC Canada exit could be a nice clean break

4 Oct 2022

The Anglo-Asian lender is diminutive in a market dominated by a few giants. That, though, might make it easier to sell its profitable Canadian operations without too much antitrust and politics. Tiptoeing away from Canada’s carbon-intensive energy sector can’t hurt either.

Beware spins from Danaher’s well-oiled M&A machine

4 Oct 2022

The $200 bln conglomerate plans to separate yet another division, this time packaging and water filtration. Its acquisition nous generates strong returns, but recent castoffs have disappointed. Transferring the parent’s kaizen-based system to its progeny is proving difficult.

Abu Dhabi would be a logical owner for Gunvor

4 Oct 2022

ADNOC, the emirate’s huge oil company, is interested in the privately held commodities trader. Gunvor’s valuation involves guesswork, and it used to be owned by a target of U.S. sanctions. But the UAE could use the group’s roster of gas client relationships, and it has the cash.

RWE’s U.S. swoop is investors’ gain, Europe’s loss

3 Oct 2022

Germany’s largest utility is paying $7 bln to make a push in U.S. solar power just as juicy subsidies are set to fuel a clean energy boom. That and a fair price tag should please investors. The move risks depriving Europe of green investments as it fights an energy crisis.

German energy bailout belatedly outclasses Europe

30 Sep 2022

Berlin will borrow 200 bln euros to help consumers cope with rocketing energy prices. It’s not the first state to go for a shock and awe approach, but Germany’s ample fiscal space gives it way more scope to go big. Unlike the UK, it can also do so without spooking investors.

Ukraine has more pluses than minuses for climate

26 Sep 2022

The Russian invasion has prompted other countries to boost gas production and burn more coal. Climate diplomacy is on ice. But this crisis will also prompt a dash for cheaper and more secure renewable energy. That helps the fight to slow global warming, says Hugo Dixon.