Energy

RWE throws down gauntlet to EDF in British Energy auction

10 Apr 2008

By making an indicative £11bn cash offer for British Energy, the German utility is clearly serious about winning the auction for the UK nuclear group. But EDF must still be considered the front runnner, particularly if it partners with Centrica, as it should be able to pay more.

Mooted EDF-Centrica tie-up underlines EDF need for allies

4 Apr 2008

The French electricity giant has plans for foreign expansion but is afraid its stateowned status won t make it welcome in Europe. That s why it needs local allies like Centrica of the UK to take over British Energy, or ACS of Spain for a potential bid for Iberdrola.

Gazprom’s North African push underlines production problem

3 Apr 2008

The Russian gas monopoly will get a stake in Libyan gas fields after swapping assets with ENI of Italy. More than just another power play, this is mostly a sign of Gazprom s need for new resources after failing to invest enough in research and production in the last few years.

China seeks to lock up its energy supplies

2 Apr 2008

Its $50bn export credit promise to Nigeria provides an inside track to the country s energy reserves. Nigeria needs infrastructure, and exportbased lending enables projects to proceed. China s international strategy echoes Cecil Rhodes more than it does Adam Smith, but it works.

BP’s luck may be up in Russia

25 Mar 2008

The oil major has so far navigated the treacherous waters of Russian politics better than rivals Shell and Exxon. But Russian authorities have been making hostile moves. It could be nothing, but with 20% of BP s oil production coming from Russia, losses there would hurt badly.

Exxon should settle with Venezuela

18 Mar 2008

A UK court freed billions of Venezuelan assets frozen last month over its row with Exxon. The Texan titan now as a decision: apply more pressure or settle the dispute quietly. While Exxon is in the right, it has little to gain by digging in its heels.

British Energy sale could spark utility feeding frenzy

17 Mar 2008

The UK nuclear power company is in talks over a possible sale. British Energy may have a patchy operational record, but it holds the key to £20bn to £30bn worth of new plants in the UK. The economics look juicy, if risky.

European power giants should hop the pond

12 Mar 2008

The Continent's big utilities may have hit a wall in terms of intraEuropean consolidation. But new opportunities lie in the US. The fragmented US power market is in dire need of capital and can give the Europeans more bang for their buck.

New Gazprom row is Ukraine’s doing

5 Mar 2008

A longbrewing dispute over gas prices has led to a new threat by Gazprom, the Russian gas giant, to cut supplies to Ukraine. But infighting within the Kiev government, not Gazprom bullying, is at the heart of this latest dispute. Ukraine should clean up its act.

Iberdrola should avoid a scorched earth defence

28 Feb 2008

The Spanish utility s complaints to the EU and the Spanish regulator offer a bitter taste at how it hopes to shield itself by raising a legal and political ruckus. Instead, Iberdrola should focus its fight against France s EDF on extracting maximum value for shareholders.

Blackstone’s energy success may be tough to repeat

27 Feb 2008

The buyout shop has teamed up with Petroplus and First Reserve to buy US refining assets. It has a profitable history in the sector. But refineries look pricier than when Blackstone bought Premcor in 1997. And without much leverage, its returns could be hard to replicate.

China’s oil companies should stay at home

27 Feb 2008

In the race for resources, statecontrolled Chinese energy companies have made little headway in topping Western oil majors. While they have some cost advantages, this doesn t seem to be helping them nail the big contracts. There are better opportunities right under their feet.

EU should avoid a French energy stitch-up

26 Feb 2008

In order to merge, SuezGDF must sell Belgian gas subsidiary Distrigas. The likely buyer is EDF. The French government then would control both the French and Belgian energy markets and undermine Brussels attempt to jolt the continent s stagnant utilities.

Pipeline politics

22 Feb 2008

The Nabucco pipeline project is crucial if Europe is to reduce its dependence on Russian gas. But it will never fulfil its potential and may not get started until the EU drops its objection to importing Iranian gas.

Chavez’s US oil embargo would backfire

11 Feb 2008

The Venezuelan strongman threatened to cut oil exports to the US amid his row with Exxon. In the short term, an embargo would be worrisome. But the US could eventually tap supply elsewhere, whereas there are few other markets for Venezuela s difficulttorefine crude.

Is Exxon’s Chavez victory a Pyrrhic one?

11 Feb 2008

The oil titan s partners in a huge Venezuelan field caved in to Chavez s demands. Exxon went to court and won a UK court order freezing $12bn of Venezuelan assets. Exxon was in the right. But the litigious approach could hurt it later, if oil states prefer more pliant partners.

Is it time for Shell to call it quits in Nigeria?

7 Feb 2008

Shell already hands 95% of oil revenues to the government. In return it has to deal with creaky infrastructure, angry rebels, and now a regime bent on taking even more of the profits. Nigeria s offshore fields look promising, but the onshore effort may not be worth the trouble.

BP’s Hayward needs an axe, not scissors

5 Feb 2008

The company s earnings were soso compared with rivals. Its cost base remains high and current austerity measures aren t putting the energy giant back on track. BP s CEO should take a page from Exxon s book and start chopping, not snipping, at its bloated workforce.

Exxon well-positioned to exploit energy price tumble

1 Feb 2008

The Texan titan raked in a record $40.6bn in profit last year. But unlike its competitors, Exxon has been stockpiling cash. Though it s a notorious bargainhunter, Exxon s $34bn in dry powder will come in handy if tumbling energy prices open acquisition opportunities.

Reserve silence undercuts Shell’s profit party

31 Jan 2008

The oil giant just reported the largest profit ever by a British or Dutch company. But its decision to delay the release of its oil reserve data evokes memories of the accounting scandal that rocked the company four years ago. It should ease or confirm investors' fears.