Energy

Enel should reconsider a Terna IPO

28 Nov 2003

Floating a minority stake Enel s preferred route doesn t look like the best way to create value for its shareholders. With at least one potential buyer circling Enel's Italian electricity grid, Enel should explore all options for Terna.

SCH loses first round in Total battle over Cepsa

26 Nov 2003

A Hague court has provisionally frozen SCH s stake in the Spanish oil firm until it makes a final ruling. This could take two years. If SCH s plan was to sell Cepsa from under Total s nose, quickly and at a fat premium, that has now been nixed.

National Grid ups dividend, cost cuts

20 Nov 2003

There were fears that bad publicity from recent blackouts would make it hard politically for the firm to up payouts. But the British grid operator appears unfazed. The dividend increase alone is worth about an extra 15p per share.

RWE’s Roels on a roll

13 Nov 2003

The new CEO is slowly whipping the German utility into shape. Group debt is coming down thanks to disposals. Costs are falling too. But what s been achieved so far shows how much remains to be done. RWE is yet to prove that its multiutility strategy works.

International Power slashes forecasts

11 Nov 2003

Depressed US electricity prices have plunged the outlook for the British generating company into darkness. But IP s current share price assumes that US power prices will remain depressed indefinitely. That is unrealistic.

Russia says oil price is too high

4 Nov 2003

The world s second biggest oil exporter wants OPEC to boost output so that prices fall back to around $25 a barrel. But OPEC seems to disagree. This is all part of a complex market share game. It may also be a Russian sop to the west, postYukos.

Russia sequesters Yukos shares

30 Oct 2003

The intensity of the confrontation between the Kremlin and oligarch Mikhail Khodorkovsky has just gone up a notch. The worry is that all Russian property rights are affected. If anything is enough to halt Russia s structural bull run, this is it.

Italy sells 7% of Enel to Morgan Stanley

30 Oct 2003

The E2bn placement is the latest in a string of recent capital market deals that have combined privatisation with a big block trade. Even so, the deal only nibbles away at the overhang that has dogged Enel s share price.

BP unfazed by Russian turmoil

28 Oct 2003

The oil firm has declared its confidence in the Russian government in the wake of the Khodorkovsky affair. As a major investor in Russia, maybe it has to say that. But foreign investors do seem to be keeping their nerve.

Khodorkovsky’s arrest rocks Russia

26 Oct 2003

By locking up the country s richest man, Putin has declared open war on the oligarchs. Robber baron capitalism was never attractive. But the risk is that the crackdown will lead back to a police state.

Shell takes a big knock

23 Oct 2003

The oil firm s latest results came in under expectations, even allowing for exceptionals. Its return on capital slipped too. There is some consolation. Results like these should bash any idea of a major acquisition such as Anadarko firmly on the head.

E.ON bids £1.1bn for Britain’s Midlands

21 Oct 2003

The German utility has swooped. It has offered 96p to Midlands Electricity's bondholders, versus the 86p Scottish & Southern offered. E.ON squeezed some of the extra money out of Midlands shareholders. True to its spendthrift ways, it also offered a bit more.

BP lays out its Russian stall

16 Oct 2003

40,000 man hours of due diligence were enough for BP to feel comfortable about investing $7bn in Russia, but not investors. BP has not bet the farm on Russia with this deal. Nevertheless, it is still a punt on Russia and on continuing high oil prices.

National Grid still hankers after mega-M&A

9 Oct 2003

The British firm is one of the few utilities still keen on expansion. One plan is to sell off three local gas networks worth £3bn. The second part of the scheme is to recycle the capital into US acquisitions. But a better option could be to recycle cash to shareholders.

E.ON mulls return to the acquisition trail

8 Oct 2003

The German utility is reportedly in talks to buy Midlands Electricity, the UK business that Scottish & Southern almost bought. Yet E.ON will struggle to improve the structure of SSE s bid, which hurt Midlands bondholders. The only other option is to pay more.

Danish utility Elsam bids $1.7bn for Nesa

6 Oct 2003

The municipally owned power generator appears to have outmanoeuvred an earlier offer by stateowned Danish oil firm Dong. But Elsam s offer could yet fall at a number of fences. Dong has been dinged, but it s not out yet. But Elsam s offer could yet fall at a number of fences. So while Dong has withdrawn its offer, it could yet come back.

Exxon in talks with Russia’s Yukos over $25bn deal – FT

3 Oct 2003

If the US oil major really does take a 40% stake in Yukos it will be coming in late to Russia but coming in very big. Given Exxon's track record of focusing on returns, any deal should give investors worried about BP's own Russian deal some comfort.

British Energy agrees £1.4bn restructuring plan

1 Oct 2003

The nuclear generator is not about to go under, and Brussels is unlikely to nix the plan. Britain s lights will stay on. Everyone has had to take a haircut. But bondholders appear to have come out best.

Eni’s Mincato sticks to his guns

30 Sep 2003

The chief executive of the oil group continues to come under pressure from politicallyappointed board members. The feuding illustrates the instability of the government coalition. But Mincato is a tough nut and, hopefully, will see it off.

Wrong to blame markets for Italian blackout

29 Sep 2003

It is also wrong to blame liberalisation and insufficient investment. The real culprits behind the blackouts in Italy, Sweden, Denmark and the US are politics and poor regulation.