Energy

Pinault’s hostile interest in Suez breaks French taboo

12 Oct 2006

The billionaire's readiness to pay E18bn for Suez's water interests in a breakup shows how the French fortress mentality is splintering. Pinault's scheme may come to nothing. But it strengthens the case of Suez shareholders to get better terms from merging with GdF.

EU regulators play tit-for-tat with Gazprom

12 Oct 2006

This may be political concerns dressed up as regulatory ones. But, ultimately, both sides need to find some way to cohabit on energy. Russia is making it hard for western oil firms to operate; now Brussels says Gazprom could face antitrust issues if it expands into Europe.

Gazprom snubs foreigners on gas deal

10 Oct 2006

While this might ease supply concerns in Europe, it will also redouble Russia s efforts to capture direct access to European gas customers. The decision to develop Shtokman alone is another example of resource nationalism. The gas will now go to Europe, rather than the US.

Opec can get its way for a while

9 Oct 2006

The oil producer s cartel wants to defend $60 per barrel oil. It s not impossible. Demand and supply are well balanced at that price. But not forever. The cost of new oil production is much lower. The lure of profits will eventually prove stronger than the will of Opec.

Gas Natural goes speed-dating

4 Oct 2006

The Spanish utility is rumoured to have its eye on EDP, the Portuguese electricity champion, in case it can t get a Spanish mate. But a deal with EDP would probably be the leastpreferred option. It could also run into all sorts of tricky political and control issues.

Kinder buyout sets a poor example

3 Oct 2006

That's why they should inform the board promptly of MBO plans. Kinder Morgan seems to have been tardy on this score. Executives contemplating a buyout may find themselves torn between maximising shareholder value and snapping up their company on the cheap.

Refinery stocks look cracked

2 Oct 2006

The recent decline in oil and petrol prices has hit shares of refiners like Valero and Tesoro hard. Yet despite a slight recent recovery, crack spreads suggest refinery stocks have yet to hit bottom.

Gazprom bear hug on BP-TNK is not all bad news

29 Sep 2006

The Russian gas giant has for the first time openly said it would like to buy out BP s local partners at TNK. That is mixed news. Gazprom could unlock BP s stalled Russian projects. But it might also leave local rivals jealous. Rosneft might want a slice of TNK too.

Spanish firms’ voting caps should be scrapped

28 Sep 2006

Talk that La Caixa might buy an Endesa stake, however erroneous, has focused attention on a bylaw that may its deny investors a juicy bid. Endesa s voting cap is a silly rule that should be scrapped. Such caps are supposed to protect minorities. The opposite is true.

How do you finance Europe’s biggest cash bid?

28 Sep 2006

Quite easily. E.on can raise most of the E37bn cash it needs to take over Endesa by piling on more debt and still keep a singleA rating. The Germans should be able to make up the balance with a rights issue, asset sales and, possibly, hybrid capital.

E.on forced to raise Endesa bid by nearly 40%

27 Sep 2006

The German utility couldn't sit by and allow Acciona to snap up Endesa shares as that could have torpedoed its own bid. By raising aggressively, E.on may knock out the competition. But the move looks valuedestructive.

Acciona launches shock dusk raid on Endesa

26 Sep 2006

The Spanish construction firm has bought 10% of Spain s power company, and says it might go up to 25% bankrolled by Santander. The latest twist in the Endesa bid battle raises the stakes dramatically for E.on, the German bidder. It all points to a Spanish plot.

GdF-EdF merger initiative is nonsense

19 Sep 2006

Some French MPs close to Nicolas Sarkozy are reviving an old project to merge the two companies and keep them in state s hands. The project is financially barmy. It is merely a political ploy that will make the current GdF privatisation debate more confusing.

Commodity fundamentals remain strong

19 Sep 2006

Hedge fund losses and a slowing US housing market are taking their toll on the commodities markets. However, the fat lady won t sing until China goes into recession or real interest rates rise. That s not happening yet.

Unhedged energy stocks on a wild ride to nowhere

18 Sep 2006

ConocoPhillips decided not to hedge its $35bn Burlington acquisition. Now it s suffering from the collapse in natural gas prices. Anadarko, the other major US energy acquirer of the past year, followed a more prudent course.

Russia bullies the Sakhalin two

18 Sep 2006

Is the Kremlin planning another Yukos? Sabrerattling over two foreign oil and gas projects in the pacific has prompted fears it might be. But while Russia would love to terminate contracts it signed with Shell and Exxon in the 1990s, it is likely to think hard before doing so.

What’s worse than being a US utilities banker?

15 Sep 2006

The implosion of Exelon s $18bn bid for PSEG shows how difficult the process of consolidating regulated utilities has become. Without cleanup work for former Enronwannabes like Dynegy s $2.3bn deal Friday bankers would have to consider billable hours.

Veolia still shadowed by political clouds

15 Sep 2006

The French utility's interim results confirms it is doing nicely on water and waste management and its international business is booming. Boss Proglio has also abandoned talk of transforming deals. But the shares won't shine until he breaks free of his political connections.

When wastrels get a windfall, they spend it

14 Sep 2006

Nigeria, Angola and Venezuela all get more than half their government revenues from oil and all run a deficit. If the oil price falls or even merely stops rising they ll be in serious trouble.

Gazprom picks off second big European market

13 Sep 2006

The Russian behemoth's deal with Eni gives it direct access to Italian customers plus the chance to learn more about electricity generation. In return, Italy secures gas supplies and Eni gets into Russian exploration. It's probably a winwin deal, but Gazprom has held the whip.