Energy

Investors ignoring British Energy’s nuclear potential

27 Nov 2007

The UK's nuclear operator should cash in with new nuclear power stations: it's got the sites where they'll be built. Sure, Gordon Brown has yet to give the green light. But poor operational performance at its older reactors shouldn't obscure the fact that British Energy looks oversold.

Kerkorian given a gift wrapped in poison

27 Nov 2007

The takeover defence adopted by Tesoro allowed the wily billionaire to withdraw his tender offer for 16% of the US oil refiner. With refining shares plunging since he kicked the deal off, Tesoro s board gave Kerkorian an out at shareholders expense.

E26bn wind IPO may not be hot air

21 Nov 2007

Iberdrola has set an ambitious price range for the upcoming IPO of Renovables, its wind energy division. But it's not outrageous given how much governments are pushing renewable energy and the barriers to entry inherent in wind farms.

$100 isn’t a nice round number for oil

7 Nov 2007

High prices provide huge profits for exporters. The main effects are slower global growth, worse governments and more financial speculation. The only silver lining high prices deter consumption. But higher domestic taxes would do the same thing, with much less trouble.

BP’s road should get smoother

23 Oct 2007

Tony Hayward warned of a dreadful quarter. It wasn't quite that bad. Still, most things that could go wrong did go wrong. It should be easy for the new chief executive to unveil better numbers going forward. But he'll have to carry through promised changes if BP is to impress.

Halliburton bloodies Schlumberger’s nose

22 Oct 2007

Investors lopped $20bn off Schlumberger s market value because of project delays. Meanwhile, rival Halliburton has been successful in chipping away at Schlumberger s dominance in the lucrative eastern hemisphere. These slipups will make it easier for Halliburton to take even more.

Hayward scrubs BP of Browne legacy

11 Oct 2007

The oil group s new CEO has set out on something akin to a cultural revolution that s also designed to cut costs and create greater accountability. So far, his plan is terribly short on detail. What s evident is a desire to remove the baronies that developed over the past decade.

Why isn’t Big Oil making big money?

10 Oct 2007

Nobody should cry for Chevron, BP and other energy companies. But with oil at record highs, it s odd to see a string of majors issuing profit warnings. Refining margins have collapsed while oil services continue to rise, squeezing profits. This trend will continue so long as oil trades at speculative levels.

Eni should know better than to lowball

9 Oct 2007

The Italian oil giant s £1.5bn hostile bid for UK producer Burren was immediately rejected. It had already received higher offers from other interested parties. While Burren looks pricey, Eni has synergies to exploit and it s in desperate need of diversifying and replacing its shrinking reserve base.

EU shouldn’t ignore Russian gas mess

2 Oct 2007

Statecontrolled Gazprom is welcoming a likely new antiRussian government in the Ukraine with a threat to cut off supply. The EU shouldn t think this mix of politics and economics is merely a postSoviet problem. The best answer is a buyers league, including China.

Mol shareholders should pile on the pressure

27 Sep 2007

The Hungarian group vehemently opposes a E14bn offer from OMV, its Austrian oil and gas rival. Despite a 20% premium, the board won t talk. Yet Mol s shareholders are understood to favour a deal. Overcoming the shabby defence won t be easy, but investors aren t powerless.

Kazakhstan may be veering towards Putinism

27 Sep 2007

The cost doubling and two year delay at Kashagan has infuriated Kazakhstan, which bears much of the cost of the slippage. Putin tempts Kazakhstan to follow his tough antiforeigner policies and renew old ties. It will probably succumb to temptation.

Bankers test the limits with energy MLPs

27 Sep 2007

Energy companies are spinningoff billions worth of assets into Master Limited Partnerships. MLPs promise to pay a steady stream of cash to investors. But the type of assets going into new MLPs could make that promise hard to keep.

E.on’s chairman gets the protectionist bug

25 Sep 2007

Wulf Bernotat, the head of Germany s largest utility, calls for companies to be protected from hostile takeovers. He s simply wrong. He also should know better. The Spanish government s hostility to E.on prevented it from taking over Endesa. Wulf is playing with fire.

Arabs sort of welcome

21 Sep 2007

US politicians have raised concerns about a 20% Arab stake in Nasdaq, but have kept quiet on a bigger Arab interest in an oil refinery. If there s a security question with one, there should be with the other. Political posturing is petty but still potentially damaging.

EU steps back from energy big bang

19 Sep 2007

The European Commission has softened its original plan to jolt open energy markets. It won t try to break up players like EdF and E.on. That was too tough to manage politically. Instead, the Commission is aiming its regulation overhaul at nonEU companies such as Gazprom.

Mexico runs short of gas as oil explodes

12 Sep 2007

Pipeline bombs in Mexico have driven oil prices to record highs. But the damage is more to natural gas and Opec is coming to the rescue. For Mexico the news is still bad. Factories will close temporarily. The episode is an extreme symptom of Mexico s resistance to progress. Pipeline bombs in Mexico have driven oil prices to record highs. But the damage is more to natural gas. And Opec is coming to the rescue.

Repsol’s ouster from Algeria looks political

5 Sep 2007

Algeria s booting of its Spanish partners from a major natural gas project looks to be more about politics than performance. With its coffers full, the Algerians see little value in partnering with foreigners, especially ones that curb it marketing its own energy.

Suez water won’t be the sizzling type

4 Sep 2007

The FrenchBelgian utility has to spin off its environment assets in order to merge with GdF. Markets aren t wild about the plan. No wonder. The new company will be almost bidproof, with 47% of the shares tied up in a pact. And political influence could stunt profitable growth.

Sarkozy prevails in GdF-Suez merger

3 Sep 2007

The French president has prevailed over the Suez chairman, and the French utility will shed its water assets before it merges with GdF. The French state will keep a controlling 40% stake in the merged E90bn entity. It looks like Sarko has borrowed from Putin s book.