Energy

Political meddling at Eni and Enel needs to stop

29 Nov 2004

The latest rumours have Enel s boss being parachuted into Eni, to replace the oil firm's CEO. Both men have their merits. But the real conclusion from this game of politicoindustrial musical chairs is that it should stop.

Putin likes Ukrainian oligarchs, just not his own

25 Nov 2004

Russia's president has fought oligarchs at home, but his preferred candidate in Ukraine's elections has huge support from local oligarchs. The difference is explained by how privatisation spoils were shared in the two countries.

EDF doesn’t need immediate capital injection

22 Nov 2004

The French utility's supposed capital requirement is a fiction aimed at getting unions to back an IPO. The state is trying to offload a problem on to the markets. Investors may wish to play this game. But they must impose careful terms.

Russia delivers Yukos’ coup de grace

19 Nov 2004

Until now, everything that Moscow has done to Yukos its escalating tax bills, even Khodorkovsky s imprisonment was reversible. Moscow s decision to auction off Yukos key oil unit in December truly marks the beginning of its end.

EdF expected to stay in Italy

19 Nov 2004

French minister Nicolas Sarkozy is expected to agree with a governmental commission which backs EdF developing its foothold in Europe. This makes it more likely that the French electricity giant will buy out its Italian partners and minority investors in Edison.

National Grid cheats US curse

18 Nov 2004

Many European utilities have come a cropper in the States. The Grid has avoided the same fate so far by buying shrewdly and cutting costs. That doesn't mean its US adventure can be declared a complete success just yet. There are still plenty of efficiencies to extract.

Repsol ex-chairman gets monster goodbye deal

11 Nov 2004

Alfonso Cortina has reportedly received an E19m payoff after he was forced to quit from the Spanish oil group last month. This is hardly a reward for success: Cortina led Repsol s disastrous YPF acquisition. It s the price of political interference in Spain.

Areva IPO a step in right direction

11 Nov 2004

Partial privatisation of the French nuclear group, previously used as a tool for intervention in groups like Alstom and Sagem, is healthy. But don t get overexcited. The state doesn t need full ownership to engage in dirigisme.

Oil prices may have peaked

10 Nov 2004

Three times this year oil prices have lurched downwards as investors called the top of the market, each time mistakenly. Now there s been another drop. This time, though, the fall in the oil price seems to be supported by fundamentals.

EDF considers Italian exit

2 Nov 2004

Staying would be expensive and politically hazardous. But it is hard to see EDF avoiding a hit if it sells out. The French electricity giant's new boss Pierre Gadonneix is to decide whether to stay in Edison, the Italian utility, or try to sell out.

Shell, Exxon sell Dutch gas business for E2.8bn

1 Nov 2004

The two oil giants are getting out of Holland's gas pipes business, which they are selling to the government. The payment is spilt evenly between Exxon and Shell which needs to raise funds for its $45bn investment programme.

Shell goes the whole hog and unifies

28 Oct 2004

The oil and gas giant will become a UK plc with a single board, but headquartered in Amsterdam. That's much better than expected. That s the good news. The bad news is that there are still 900m barrels of questionable reserves sloshing around.

Political merry-go-round spins at Repsol

28 Oct 2004

Out goes one political appointee, Alfonso Cortina, and in comes the new government s man La Caixa's Antonio Brufau. This looks like the precursor to a politically motivated bid for Gas Natural. That s not good news for shareholders.

Royal Dutch isn’t terribly Dutch

27 Oct 2004

Only a sixth of the company is owned by the Dutch. When you look at the combined Royal Dutch/Shell, that falls to a mere 10%. This ironically may be a reason why the Dutch are reluctant to merge the two groups. But it is really a reason why they should.

BP succumbs to higher costs

26 Oct 2004

The oil and gas giant has spooked investors by upping its capex spend. What s worse, it is due to rising costs, and not new projects. BP isn t alone in finding it more expensive to run the business. But with volumes outside Russia falling, the trend can only worsen. The oil and gas giant has spooked investors by upping its capex forecast. What s worse, this is due to rising costs, not new projects. BP isn t alone in finding it more expensive to run its business. But with production outside Russia falling, the trend can only worsen.

EDF partially fills pension hole

20 Oct 2004

The French government and EDF both gain from the state s takeover of the utility s unfunded pensions. But if you think the electric group has made a big step towards privatisation, think again.

Private equity frenzy over Shell unit may not last

13 Oct 2004

But Shell's unit is bigger and more complicated. The exit isn't straightforward either. The initial enthusiasm isn't surprising. The last financial sponsor to invest in a liquefied petroleum gas business made a killing.

Kremlin uses circular logic to shortchange Yukos

13 Oct 2004

But it's only so risky because the government seems bent on crushing the company. This is yet another nasty twist in an ugly saga. The Russian government has gone for a lowball valuation for the sale of Yukos main operating unit, mainly because it is "risky".

There could still be some value in Enel’s stock

12 Oct 2004

Granted, the stock has had a big run. And Enel s margins will come under pressure if electricity prices fall. But Enel s big first year dividend should help cover the risk. And if Wind can be sold off at a premium, investors will be overjoyed.

Eni boss on acquisition trail for wrong reasons

11 Oct 2004

Vittorio Mincato says the Italian oil and gas company must double in size to avoid being taken over. That is an odd thing to say. Shareholders might well prefer being taken over for a premium to shelling out megabucks on deals.