Energy

Oil stocks continue to ignore high oil prices

25 Sep 2003

Oil shares currently discount a crude price of $19 a barrel. Yet OPEC has kept Brent well above that for the past three years. Assume that OPEC keeps oil at $25 barrel for perpetuity, or even just five more years, and the upside to share prices is considerable.

Statoil scandal claims another scalp

23 Sep 2003

The Norwegian energy group has now lost both its CEO and chairman over payments for advice on doing business in Iran. The group may now lose its international momentum. And state interference could well reduce Statoil growth prospects even further.

United Utilities rights offer intriguing choice

16 Sep 2003

Investors can opt for high income or geared exposure to the share price. This innovation is a consequence of the regulatory regime for the UK water industry. If it goes down well, others may copy it.

Statoil payment scandal rubs dirt into big oil

16 Sep 2003

The Norwegian oil group is being investigated for possible corruption linked to fees it paid for advice on doing business in Iran. Such payments may be normal in the international oil business. The issue is how they are done, and to whom they are paid.

US oil eyes stake in Yukos-Sibneft – report

15 Sep 2003

But the risks that any buyer will overpay look high. The main shareholders in Russia's soontobe merged oil giant have good reasons to want to sell up to US oil majors Exxon and Chevron.

Enel: now comes the interesting part

10 Sep 2003

The Italian utility reported bumper first half figures. One star performer was Wind, Enel s telecoms unit. The second half will be harder going. And Enel will have its plate full too, with the Terna spinoff and sale of its real estate portfolio.

Denmark’s Dong bids $1.7bn for utility Nesa

5 Sep 2003

The stateowned energy company wants to lead consolidation of the Danish power sector, and Nesa is up for grabs. But Nesa s biggest shareholders should view Dong s offer as the opening round of an auction.

BP buys Russian Slavneft stake for $1.4bn

29 Aug 2003

By agreeing to buy the stake, BP is now fully in bed with its Russian partner. BP's Russian adventure is going full speed ahead. This tidies up BP s $6.4bn venture with TNK, which owned half of Slavneft and had long wanted to go splits on that with BP.

UK power grid eyes electricity rationing

26 Aug 2003

So scream the headlines. In fact, the interruption contracts that Britain s National Grid has offered industrial users make sound sense. In return for a fee, industrial users shoulder a greater risk of power cuts. This is a sign of markets working well, not failing.

Bidders heat up for UK’s Drax power station

22 Aug 2003

Only a year ago, everyone was rushing to get out of UK generation. But rising electricity prices have reversed the current. There are now three firm bids for Drax, the UK's biggest power station. Deregulated energy markets are working smoothly.

Oil prices may remain high

20 Aug 2003

The fact that prices haven't fallen since the war has encouraged some doomsday theories, such as the notion that production may have peaked. These are intriguing, but mundane reasons, such as terrorist attacks in Iraq and Saudi intervention, may be more pertinent.

Too soon to give National Grid Transco the all-clear

15 Aug 2003

In theory, the UK energy group should be immune to compensation claims following the huge power failure at its US subsidiary Niagara Mohawk. Its contracts ought not contain liability. And it s insured by AIG. The snag is the scale of the failure and the litigious mood in the US.

Earnings jump out of their Shell

24 Jul 2003

Instead it will up the dividend by 2.5% hardly heroic. That suggests Shell is still on the acquisition trail. The European oil giant earned more than $30m a day in the second quarter. Even so, Shell is shying away from buying back shares.

EU firms haggle over energy liberalisation

21 Jul 2003

Portugal says it will finally open its energy market to Spain. But in return Spain has to lift voting restrictions it placed on EdP. This is similar to EdF's hagglings in Italy. In Portugal s case, though, it is a firm Eni that holds the key, not politicians. This is similar to the deal France s EdF has offered Italy. Such haggling is a step backwards for EU energy liberalisation.

Pressure rises for EdF chief to quit

16 Jul 2003

Most of the empire building chief executives at other giant European utilities have already moved on. If EdF was quoted, Francois Roussely would have gone too. Indeed, his continued presence jeopardises EdF s planned IPO.

Enel hopes to benefit from EdF’s troubles

10 Jul 2003

EdF wants Italy to give it voting power over Edison in line with its stake. But it may have to give reciprocal access in France. Brussels wants the voting ban thrown out; Enel isn t holding all the cards.

EdF’s international empire is falling apart

7 Jul 2003

The stateowned French utility s problems in Latin America and Italy are well known. Now its German subsidiary, EnBW, is in trouble too. The French government says it still expects to partly privatise EdF next year. In its current state, that looks unlikely.

Another Edison deal strains at the seams

2 Jul 2003

The Italian power group s Edipower subsidiary needs another E1bn of fresh money. Edison recently completed its own fraught recapitalisation. Now it has to cough up E400m, and take on some of Edipower s risks too.

Hera in E1.1bn IPO hard sell

18 Jun 2003

The Italian group's City Hall owners are practically forced sellers. And Hera is a pretty unconvincing hodge podge of local utilities. The price could help get the issue out the door. But Hera is also hoping it can whet the appetites of parrochial Italian retail investors.

Enel to dip another toe into Spain

16 Jun 2003

The Italian utility is poised to buy a chunk of Union Fenosa s renewable energy business, plus a stake in a generator. This builds on Enel s first Spanish investments in a useful, if not major way. Long term, it could pave the way for a Fenosa takeover.