Energy

Technip investors should welcome Eni bid

24 Nov 2006

The French oil services company has been underperforming. A deal with Eni s Saipem unit could allow it to improve its pricing power. Some of Technip's customers may feel uneasy, but the company shouldn t hide behind the French government to try to thwart the deal.

Suez-GdF merger in jeopardy after court decision

22 Nov 2006

A Paris court has found that GdF failed to give the unions enough time to consider the deal with Suez. So it can t happen before next March. But that is also when the French presidential campaign will be in full swing. The merger may be deadonarrival.

Breton speaks with forked tongue on Suez/GdF

20 Nov 2006

France's finance minister insists he won't give in to "greedy" Suez investors, but says any change in the terms is up to GdF boss Cirelli. Breton is clearly a man with one eye on his next job. He's determined not to carry the blame if this deal falls through.

Woodside plays hardball and loses

17 Nov 2006

The Australian energy company s hostile bid for Energy Partners expires today. Shareholders are likely to reject it on price. But repelling Woodside only increases the pressure on management to find a bidder who doesn t undervalue its assets.

Russian economic power marred by social decay

17 Nov 2006

Entry into the WTO is now almost certain, the EU is anxious to improve trade relations, and Gazprom is riding high. High energy prices and clever leadership are responsible. But Russia could still be tripped up by cronyism, corruption and murders.

National Grid pre-empts private equity interest

16 Nov 2006

The regulated UK utility hasn t received a bid, but it s sensibly behaving as though it might. It's demerging noncore operations, and returning $1.9bn of surplus cash to shareholders. That s good for shareholder value. It's also wise.

Democrats target Big Oil

15 Nov 2006

The Democrats plan to repeal $33bn in tax and royalty relief for big oil looks largely unworkable to Wall Street's relief. But there is good reason to worry. Democrats could launch costly probes into the oil industry or resurrect talk of windfall profit taxes.

Suez hand strengthened by utility frenzy

10 Nov 2006

Talks over sweetening the terms of the merger with GdF are delicate. Shareholders are demanding more than the government will cede. But recent utility activity, including Iberdrola's bid for Scottish Power, shows that Suez has other options. It has no reason to back down.

Some petrodollars are more acceptable than others

10 Nov 2006

When Russia buys a stake in Eads, Europe shrieks. When an Arab fund says it plans the same, hardly anyone bats an eyelid. True, Russia wanted board seats while Dubai is a financial investor. But money does come in different colours.

Iberdrola interest in Scottish Power looks odd

9 Nov 2006

The E32bn Spanish energy company has just revealed a big strategic plan to invest E9bn, most of it in Spain. Synergies would be thin on the ground. But Iberdrola s low gearing and Spanish tax credits means it could probably afford it.

Scottish Power gets mystery bid approach

8 Nov 2006

It wasn t RWE or E.on. Other names suggested include Scottish and Southern, EDF and even Gazprom. Don t rule out an infrastructure fund. But at the current share price of 750p, Scottish Power isn t cheap, considering E.on walked away from a 570p bid only a year ago.

Dominion deal puzzles the market

6 Nov 2006

The $50bn US energy company s decision to sell its exploration and production unit to focus on its utility business makes sense. But the way it s doing it, though an allcash deal, may wind up destroying value. Even if it fetches a high price, taxes will bite.

Suez and GdF concoct management fudge

30 Oct 2006

After weeks of feuding, the companies say their management will be equally split between Suez and GdF executives. This is unlikely to work. It will make delivering synergies more difficult. But it gives Suez shareholders a chance at better financial terms.

Big Oil hits its peak

26 Oct 2006

Lower energy prices are not the only threat to the future profitability of large oil firms; costs are soaring too. That's taken its toll on sector valuations, but at least share prices are now cheap one reason to expect another wave of consolidation.

Shell offers $6.8bn for Shell Canada minorities

23 Oct 2006

By taking full control of its Canadian subsidiary, the AngloDutch oil group should be better able to tackle its spiralling cost problems. Shell Canada shares have slumped this year so Shell is hoping the offer of a 22% premium will be enough to persuade investors.

France must pay for Suez-GdF merger agreement

23 Oct 2006

Suez and GdF have been overcoming their differences since the GdF chairman threatened to resign. The only sticking point now is price. Suez had to make concessions to get EU approval. But its shareholders are still demanding better terms and should get them.

Cheaper oil may fuel energy M&A

17 Oct 2006

As oil prices fall and drilling prospects dryup, don t be surprised to see conservative oil majors return to the acquisition trail. Energy companies like ExxonMobil are starting to window shop. But if prices continue to fall, big deals may be in the offing.

Sacyr joins in Repsol stitch-up

17 Oct 2006

The Spanish construction firm has joined forces with La Caixa to forestall a bid for Spain s beleaguered oil and gas company. Thanks to some aggressive financing by Santander, Sacyr's 9% stake is not as risky as it looks. But it's bad news for Repsol's minorities.

British Energy leak puts government sale in doubt

16 Oct 2006

It s been one thing after another at the UK nuclear group ever since the government announced earlier this year plans to sell its 65% stake. Following the latest leaks at two reactors, the stake s value is now 40% below its peak. And an imminent sale must be unlikely.

France will have to pay to rescue Suez-GdF merger

16 Oct 2006

The big energy deal is on the rocks. Frictions are increasing between the companies, and asset disposals will be greater than expected. GdF management feels shortchanged, and so do Suez shareholders. But the French government cannot afford to see the merger fail.