Energy

Mirant looks to cash in on TXU

9 Apr 2007

The power producer is considering putting itself on the block. The decision doesn t look too hard. TXU's buyout shows its assets could be sold for a premium. Mirant is underleveraged. And about half of its shareholders want a quick sale.

Total chief caught in legal morass

5 Apr 2007

The oil company s CEO has admitted that money was paid to a facilitators lobby for an Iranian contract. He denies corruption was involved. But what looks like a duck and quacks like a duck might well be a duck. This sounds like the sort of behaviour anticorruption laws aim at.

Eni props up second Yukos auction

4 Apr 2007

Still, Eni gets a big chunk of reserves at rockbottom prices. And it solidifies its relationship with the Russians. Unlike TNKBP, the Italian company actually won. But Gazprom has the right to buy back 80% of the prize within two years.

Endesa carve-up: winners and losers

3 Apr 2007

The clear victor is Acciona, which has secured a lucrative deal. Enel, its partner, is also a winner, but it has paid a fancy price. The clear loser is Spain, whose protectionist meddling hasn t saved a national champion. Meanwhile, E.on s loss could be a blessing.

TNK-BP made to look silly in Yukos auction

28 Mar 2007

The RussoBritish venture pulled out of the auction for a 10% Rosneft stake. It's excuse that it was hard up looks plain ridiculous. But TNKBP may not mind that. It had other motives for bidding than the desire to buy anything.

Enel/Acciona launch surprise spoiler bid for Endesa

23 Mar 2007

The Italian utility and Spanish builder say they ll make a joint offer for Endesa if less than half of its investors accept E.On s bid. The timing is sharp indeed, and makes it unlikely that E.On will succeed. This longrunning saga has further to go.

Spain’s ACS turns itself into an investment trust

21 Mar 2007

Its 25% purchase of Germany s Hochtief adds yet another asset to its eclectic collection of stakes in large quoted companies. To be fair, the strategy has worked pretty well so far. But it s still far from clear ACS can add much value to its investments.

Halliburton finds a friendlier home

13 Mar 2007

The oilservice company will move its CEO to Dubai. The company should benefit in customers, tax and politics. Big companies find it easier to move HQs, as hometown roots get shallower. It s a challenge for governments.

Suez’ great shape throws doubt on GdF merger

8 Mar 2007

The utility s earnings soared 44% last year and the company will boost shareholder returns with a 20% dividend hike and share buybacks. Suez says it is still intent on going ahead with the troubled merger with GdF. But its performance suggests it is doing fine on its own.

Repsol looks set to rejoin Spanish energy M&A frenzy

8 Mar 2007

The latest rumour doing the rounds is that the oil firm may merge with two local utilities to form a Spanish champion . But this idea makes little financial sense. A better way to create value would be to breakup Repsol instead.

E.on can live with Endesa poison pill

7 Mar 2007

The German utility is no longer making its bid conditional on scrapping Endesa s 10% voting restrictions. This makes strategic sense. It doesn t want Acciona and Enel, which now hold a combined 43% stake, to take de facto control. Neither does Endesa.

Investors make wrong call on RWE boss

6 Mar 2007

Harry Roels contract wasn t renewed after he failed to deliver the kind of expansion strategy rival German utility E.on is pursuing. Had investors bothered to check, they might have notice that RWE has outperformed E.on by a mile since Roels took over.

Enel’s Spanish adventure is fraught with risks

2 Mar 2007

The worst scenario is that Madrid is merely using Enel to fend off a rival German bid for local utility Endesa. The best outcome might be a friendly Enel/Endesa merger. But jobsharing at the top could lead to Eadsstyle paralysis hardly ideal.

Enel crashes E.on’s bid for Endesa

28 Feb 2007

The Italian utility has taken a 10% stake in its Spanish rival and may go higher, making it impossible for E.on to win full control. This reeks of political meddling by both the Spanish and Italian governments. But the Germans won t go down without a fight.

Is Henry Kravis the next Brian Hunter?

27 Feb 2007

Of course not. But KKR s bet in the $45bn buyout of TXU isn t all that different from Amaranth s it s a play on natural gas prices rising. That s because returns on equity are capped for TXU s regulated businesses. All the juice must come from the power and supply businesses.

TXU will be private equity’s biggest PR challenge

26 Feb 2007

Even in freewheeling Texas, utilities are highlyregulated, political, consumersensitive and the target of environmentalists. The record $44bn buyout of the US utility will require asyet unseen powers of persuasion on the part of KKR and Texas Pacific to succeed.

World frets needlessly over Russian gas cartel plans

15 Feb 2007

Even the country s energy minister agrees that an Opecstyle gas cartel is impractical, uneconomic and implausible. But the word Opec is so emotive that it has still unsettled western gas consumers, which is the whole point.

New Total CEO enters risky era with record profits

14 Feb 2007

The flamboyantlymoustachioed CEO inherits a company with strong output prospects as oil exploration becomes more difficult and risky. He might be distracted by his indictment on corruption charges and Total s image problems. But the company s strategy should not change.

Chubais demands Gazprom stick to its knitting

14 Feb 2007

He has a point. Russia s gas monopoly isn t producing enough gas yet it keeps spending money on nongas activities. But the Russian electricity boss may be wasting his breath. Gazprom s behaviour is a rational response to Russia s low domestic prices.

BHP brushes off boss loss with bumper $10bn buyback

7 Feb 2007

The AngloAustralian miner can do no wrong. Goodyear's resignation may not be good news, but there are strong contenders awaiting the call. BHP's real conundrum, like other miners, is how to deploy a tsunami of cash. Jacking up buybacks makes more sense than piling on capex.