Energy

EDF over a barrel in Italy – again

19 May 2004

The French electricity giant wants to delay its commitment to buy Fiat and friends out of Edison at inflated prices. If it wants to get the Italians on side, it is likely going to have to pay over the odds.

Repsol looks cheap

12 May 2004

Concerns about Argentina and uncertainty about the future of Gas Natural have weighed on the Spanish oil and gas company. But Repsol has come a long way since it blazed a trail in Argentina with YPF. Exploration and production look promising too.

Oil companies look undervalued

10 May 2004

Crude prices might be at 13year highs, but shares in oil companies are discounting a longterm price of just $21 per barrel. But that looks too low. The likes of Exxon Mobil and Repsol look cheap.

Oil prices might be headed for a mini-correction

5 May 2004

Financial investors have been piling into oil attracted by fundamentals and lack of attractive returns elsewhere. A rise in interest rates might cool them off. Even so, Opec will probably ensure it is a shallow correction.

Shell in $2bn buyback

29 Apr 2004

The buyback and the aboveexpectations first quarter results are the first pieces of good news from the troubled oil giant this year. But shareholders need to keep up the pressure. The AngloDutch group still doesn't appreciate how much it needs to change.

BP plans $5bn chemicals IPO

27 Apr 2004

The move makes sense the basic chemicals unit has been dogged by poor returns. But that also means floating it might be hard. Italy's Eni has struggled to find any buyers for its chemicals arm.

Total eyes Sibneft stake – report

26 Apr 2004

The French oil company doesn t necessarily need a deal it has better growth prospects than its rivals. But Total is right to strike opportunistically, while Shell is in the dumps, and the Washington/Moscow conflict keeps the US majors offside. But Total is right to strike opportunistically, while Shell is down and the US majors are out of favour due to political tensions over Iraq.

Is Yukos about to go bust?

21 Apr 2004

S&P thinks the risk is significant after a court froze its assets. But there are reasons to believe it is not in imminent danger. For the brave investor, shares in the Russian oil company look cheap.

Shell stops short of its much-needed revolution

19 Apr 2004

The oil giant has ousted the CFO and plans to speed up its corporate governance review. That's good news. But Shell really needs a more thoroughgoing reform of its dualheaded introverted culture if it is to close the valuation gap with BP.

CGE to raise £2bn to buy power stations – report

7 Apr 2004

The group has changed tack. It will now offer cash in addition to bonds for distressed UK power stations. This will increase its bids attractiveness, but success for CGE is still a long shot due to rising electricity prices.

Opec cuts quotas despite soaring oil prices

1 Apr 2004

That's not quite as odd as it sounds. But with prices above $30 per barrel, the oil cartel is likely to say one thing and do another.

EDF debt prices in government guarantee

29 Mar 2004

The French utility is set to lose government backing of its debt. But debt investors are still pricing in some sort of implicit guarantee considering the company s massive off balance sheet risk.

BP plans to return excess cash to shareholders

29 Mar 2004

The oil major has based its investment projections on a prudent assumption for the oil price. And if oil prices are higher, it will return extra cash to shareholders. This discipline is admirable.

Opec in a bind

25 Mar 2004

Will they, won t they? The oil cartel is in two minds about whether to cut supplies at next week s meeting. That's because a skyrocketing oil price isn't helpful in the long run.

Shell mess shouldn’t set off epidemic

22 Mar 2004

The oil company's reserves cut seems to be down to poor management. Better managed rivals shouldn't have to follow suit. That is why investors are so cheesed off with Shell.

Enel shares look undervalued

19 Mar 2004

The breakup of the Italian group spinning off or selling telecoms, the grid and property could cut the current conglomerate discount. There is even a chance of getting something of a premium for Wind, Enel's telecoms unit, now that telecom M&A is coming back in vogue.

Shell’s reserves shrink again

18 Mar 2004

The latest cut is smaller than January s bombshell, but it s still pretty disappointing. And there could be more bad news to come, both in the shape of further cuts and the regulatory backlash.

Abramovich shops around Sibneft stake – report

12 Mar 2004

The Russian oligarch wants out, and there is no shortage of western firms salivating over the oil company s reserves. The snag is that Sibneft isn t his to sell, and it s not clear the Kremlin would warm to a deal.

The worst is over for Suez

4 Mar 2004

Hefty restructuring charges in 2003 pushed the French utility into a E2.2bn loss. The acquisitiondriven expansion of yesteryear is over. The question is, what follows next? The group has laid out ambitious organic growth targets. They should be treated sceptically.

Sir Phil Watts quits as Shell chairman

3 Mar 2004

Watts got his comeuppance. Even if he wasn't responsible for the reserves debacle, he handled it abysmally. This opens the way for a revolution at Shell. As such, it is an incredible victory for shareholder activism.