Energy

Suez turns to a future without Gaz de France

30 Aug 2007

The FrenchBelgian utility s firsthalf results help show the politically inspired merger with GdF isn t necessary. Nicolas Sarkozy wants Suez to trim down. Suez wants the government to bulk up GdF. Unless one side blinks, the merger is dead.

Kazakhstan is no Venezuela

28 Aug 2007

The country is upset by delays and ballooning costs at its Kashagan oil field. But it is not about to throw its foreign partners out. The Kazaks will probably push its partners to give it a greater slice of the project s early profits to make up for the delays. The Kazakhs will probably push their partners to give them a greater slice of the project s early profits to make up for the delays.

Expanded trading investigation worsens BP’s woes

13 Aug 2007

The energy giant revealed that the US government has expanded its probe into possible manipulative energy trading. It is scrutinising four more years of BP s trading, putting billions more of the company s past profits under a microscope.

Belligerence, not oil, fuels Russia’s arctic antics

10 Aug 2007

The Arctic has only moderate oil wealth, mostly in the Russian zone. Thus it s not worth fighting over. However, Russian belligerence reflects a calculation that the West will generally cave in to economic bullying, in both cold and hot places.

E.on goes windy in Spain

8 Aug 2007

The German energy company will spend E1.3bn to buy and invest in wind power farm operator Energi E2 Renovables. It s part of a strategy. Like other European utilities, E.on hopes to gain from rising renewables valuations by listing its division. Investors should be careful.

Oil prices may be set to tumble

31 Jul 2007

At $78 a barrel, oil is so expensive even Opec says it s overvalued. But speculators continue to bid it up, despite record supply. Hurricane fears seem to be fuelling the speculation. But if the weather stays as calm as last year, oil prices could slip away.

TXU bid battle might be Franklin’s Alamo

27 Jul 2007

The US mutual fund has good reason for opposing the Texas utility's $45bn buyout by KKR and TPG. But thwarting the deal will be hard. The shareholder base is fragmented. And with the markets in trouble, the buyers might already be gagging on the deal.

Big Oil has a big slip

26 Jul 2007

ExxonMobil reported its first profit decline in 3 years, missing estimates. Special items and divestures were partly to blame. But declining production presents the biggest worry. The question is whether it s a blip or a sign of headaches to come.

SunPower’s clever convertible two-step

24 Jul 2007

The solar power group is both issuing a convertible and lending treasury stock to hedge funds that want to short it. But under US accounting law, neither gimmick is considered earnings dillutive.

Is BP silly not to pay silly money to traders?

24 Jul 2007

New chief Tony Hayward said he won t compete with Wall Street. He should rethink that given the importance of trading to BP s profits. The energy giant said trading income fell in the second quarter as it lost professionals to banks and hedge funds.

Goldman and Lehman dig deep on drilling deal

23 Jul 2007

Just as credit markets are wobbling, the firms are extending a massive $15bn bridge loan to merging drillers Transocean and GlobalSantaFe. But earnings visibility and the potential for growth make this a safe bet. The combined company will generate plenty of cash to pay debt.

Accidents should not hold up nuclear power

17 Jul 2007

Occasional problems, such as the leak at Japan s Kashiwazaki plant, may be used by opponents of nuclear power to hold up new plants. But as energy and commodity prices rise, the economic and environmental cases for nuclear power grow stronger.

Mol adds yet another shabby defence tactic

17 Jul 2007

OMV s bid looks dead in the water unless it gets some help from Brussels. But that isn t likely to come soon. The Hungarian oil company has resorted to hugely optimistic forecasts to justify rejecting an unwanted E13bn bid from Austria's OMV.

Iran is smart to buy yen

16 Jul 2007

Asking Japanese refiners to pay in yen is unlikely to help Iran avoid sanctions. But it will be a good investment if the currency recovers. Even with low rates, the yen looks more attractive than the dollar or euro. Ahmadinejad may be as good at investment as he is at politics. Even with low rates, the yen looks more attractive than the dollar or euro. AhmadiNejad may be as good at investment as he is at politics.

Russia does not always have the energy whip hand

13 Jul 2007

The government kicked foreign energy firms out of the giant Shtokman gas field last year. But Gazprom couldn t manage on its own. So now it has brought Total in as partner. And it looks like the French firm has won better terms than Gazprom first envisaged.

ExxonMobil hits $500bn

12 Jul 2007

Exxon's scale has conferred huge advantages. But the supermajor faces supersized obstacles on its march to the $1 trillion mark. CEO Rex Tillerson needs everlarger deals to move the needle. But expropriation and competition make this hard to achieve profitably.

Oil spike says more about inflation than energy

10 Jul 2007

Sure, troubles in Nigeria make a tight market even tighter. But simple supply and demand can t explain a 45% price increase over six months. The pressure comes more from speculative commodity buyers. They have enough money to push up prices sharply. It s an inflationary world.

Endesa effect spreads through EU energy M&A

9 Jul 2007

Remember how Spain wheeled out a complex defence to keep national energy champion Endesa out of foreign hands? Hungarian oil firm Mol is using similar tactics against Austria s OMV only it s taken that defence to a whole new level of complexity.

Browne’s BP exit looks increasingly graceless

9 Jul 2007

The oil major has agreed to freeze millions of dollars benefits due to its former boss. That gives US lawyers something to fight over. The directors are also on the hook. So they have every reason to hold Browne personally responsible for the company s safety lapses.

Oil majors adopt fight or flight expropriation strategies

27 Jun 2007

At first sight, it might seem US oil firms are responding more aggressively than Europeans to Russian and Venezuelan expropriation. On closer inspection, there s no obvious national style at work here it s more about a realistic assessment of each companies options.