Energy

BHP’s deal willpower put to ultimate test

15 Feb 2022

A record $7.6 bln interim dividend speaks to the miner’s rude health. Boss Mike Henry sees opportunities from inflation and less risk in China. His confidence and a simplified share structure make capital discipline even harder in the quest to bulk up on energy-transition metals.

High power prices are no reason to ditch net zero

14 Feb 2022

Some politicians blame soaring energy costs on the global drive to cut carbon emissions. Yet climate change policies don’t explain the price spike, while investment in oil and gas is high enough. The criticism risks undermining tougher challenges like reducing demand for power.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

Top Aussie polluter sets up new investing quandary

10 Feb 2022

Poor earnings and market reluctance to finance fossil fuels left AGL Energy scrambling to fund the coal-heavy unit it is demerging. The company’s latest idea is a separate fund for renewables, but it also seems to be repeating a pitch for state aid. It’s a hard mix to swallow.

BP inserts wind in sails of its energy transition

8 Feb 2022

The $110 bln UK group joined oil peers in reporting bumper results. But it also pledged to maintain fossil fuel profitability despite cutting output, and gave new 2030 targets for its low-carbon growth business. That could start to revive its becalmed valuation.

Offshore wind power gets a tartan quantum leap

7 Feb 2022

The green energy’s drawback is its major use of scarce coastal shelf. Scotland’s recent auction of 15 gigawatts of floating turbines, enough to power 60% of UK homes, changes the game. The economies of scale created should make a nascent technology cost-competitive quicker.

Rishi Sunak bets he’s a good gas trader

3 Feb 2022

The UK chancellor is spending 9 bln pounds to help consumers facing a 50% hike in energy costs. If gas prices fall back by next year, he’ll get most of that back. If they don’t, the state faces a bigger hit. Either way, this package looks too small to prevent a political furore.

Shell oddly well placed to resist oil’s siren call

3 Feb 2022

The $200 bln UK driller is keeping a lid on new investment, despite $90-a-barrel oil prices. A court order to cut emissions and investors’ desire for cash explain why. But Shell’s recent exit from shorter-life U.S. shale makes a sensible ramp-up of new output harder anyway.

Siemens Gamesa’s new Mr. Fixit can take his time

3 Feb 2022

The wind turbine maker has ousted its second CEO in two years. As another German, Jochen Eickholt may get a frosty reception from Spanish bits of the firm. Parent Siemens Energy won’t mind. The longer Gamesa’s woes drag on, the easier it will be to buy out minority investors.

OPEC gets closer to a Wizard of Oz moment

2 Feb 2022

When the curtain fell back, the fairytale character’s powers proved bogus. The cartel’s ability to steer crude prices rests on the market believing it can boost production. Challenged members like Angola make that tricky, raising the risk oil prices soar higher still.

Big Oil faces cash tug-of-war

1 Feb 2022

Both Exxon and Chevron slashed expenditures last year as economic slowdowns stalled oil demand. Both companies’ earnings show the cash spigot is on. With oil around $90, reformed spending sinners will get the urge to splurge. Shareholders might prefer cash goes back to them.

Italy energy firm dive is Rome’s latest hot potato

1 Feb 2022

Oil services firm Saipem may need at least 1 bln euros of fresh equity after warning of a loss just three months into a new business plan. The shock puts pressure on new CEO Francesco Caio. Given the uncertainty, top investors Eni and the Italian state may foot most of the bill.

Siemens Energy wind fix would be worth the money

28 Jan 2022

The German group may buy out minority investors at struggling wind-turbine subsidiary Gamesa. The 5 bln euro bill sounds steep, especially as the problems may be temporary. Yet Siemens Energy can afford it, and it would get to keep the upside for itself when wind power scales up.

The Exchange: Hydrogen wave

27 Jan 2022

Can green hydrogen decarbonise big chunks of our economies? Air Products CEO Seifi Ghasemi, who’s backing the carbon-free gas in a major Saudi Arabia project, thinks so. He tells Lisa Jucca how his $61 bln group plans to be the world’s top green hydrogen producer in five years.

Italian CEOs’ Putin call exposes European discord

26 Jan 2022

Rome is pushing the firms to scrap their virtual chat with the Russian leader. With their varying degrees of investment, trade and energy dependence, Europeans have more to lose from sanctions against Moscow than the United States. That lets Putin pit them all against each other.

New backer would fuel Aussie hydrogen hype machine

25 Jan 2022

Fortescue’s ambitious plans to use the gas for renewable energy help it trade at a premium to mining peers. Scant detail raises concerns, however. Chair Andrew Forrest could ease them by selling a stake in the FFI green unit, as GM and Ford did with their self-driving outfits.

Eni’s quirky rejig may turn rivals green with envy

24 Jan 2022

Italy’s $54 bln oil major may list stakes in its green energy and biofuels arms, as well as a Norwegian subsidiary. That’s different from rivals which are financing green investments by selling fossil fuels. Yet if Eni’s spinoffs get cheaper financing, others may follow suit.

New England chooses expensive dirty power

19 Jan 2022

Like Japan, the area has shut down nuclear plants and is relying more on gas, wind and solar. But unwillingness to build pipelines and upgrade electric transmission creates a system that is costlier, dirtier, and potentially more unstable than need be.

Imperfect UK energy fix would still kill two birds

19 Jan 2022

Finance minister Rishi Sunak faces pressure to help consumers with high power bills without busting the budget. The least-bad plan would spread energy costs over some years. By curbing price pressures, he will also limit inflation-linked bond payouts and public sector pay hikes.

Power windfall tax is bad idea whose time has come

17 Jan 2022

European leaders are under pressure to help households with soaring power bills. Taxing energy companies is potentially ineffective and replete with unwise incentives. The idea could nevertheless catch on, and oil giants like BP and Shell may need to take the strain.