Energy

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.

Opec seeks to protect market share

10 Jun 2003

The oil cartel wants independent producers to join it in making any future output cuts, should the need arise. It may not need to. Oil firms' financial discipline has limited their scope to jack up output in the longer term.

EdF’s pain in Italy isn’t over

30 May 2003

One way or another, the French electricity giant seems destined to have to sink yet more capital into Edison. EdF will either be forced to buy out all the minorities at an inflated price or give leading shareholders a juicy sidedeal.

SSE buys Midlands for less than its debt

22 May 2003

Even so, SSE is not getting a steal. The £1.1bn offered is 10% more than the value of Midlands regulatory asset base. For Scottish & Southern's bid to go through, Midland bondholders have to take a 14% haircut.

Russia remains a goldmine for investors

12 May 2003

Strong oil prices have helped turned the country from a black hole to one awash with black gold. Russian capitalism has matured too. Lingering perceptions of risk are captured in stilldepressed relative valuations. Such discounts may have room to narrow.

EdF could lose from reported move on Edison

2 May 2003

The reason why financier Zaleski could be increasing his stake to 15% of the Italian energy group is unclear. He may be exploiting Italy's takeover rules to get a virtual put option on the stake. And who would he put it to? EdF, the old sugardaddy.

Big Oil earnings hit the roof

2 May 2003

First quarter profits tripled at Exxon, more than doubled at BP, and rose 96% at Shell all thanks to high oil prices. There are peak earnings. So is it downhill from now on? Perhaps. But a fall in oil prices is not the biggest risk for the Three Sisters.

OPEC ties itself in knots over output cuts, Iraq

25 Apr 2003

The speedy end of the Iraqi regime has vastly complicated OPEC s already delicate balancing act. It is always easier for the oil cartel to up output. Far harder is ensuring compliance to production cuts.

Italenergia looking at E1.9bn final tab for Edison

23 Apr 2003

An attempt get the market to share some of the pain was largely unsuccesful. Outside investors only stumped up E180m. So Fiat, EdF and friends who have already put in E1.5bn must put in another E400m of equity.

Yukos and Sibneft agree to merge

22 Apr 2003

The deal, creating a $35bn supermajor, protects key Russian oil assets against foreign takeover. Oil companies have spearheaded Russia s corporategovernance reforms. But this has left them vulnerable.