Energy

Three Gorges will bridge its renewables IPO gap

15 Apr 2020

The Chinese state giant plans a $3.5 bln offer for its clean energy unit. Raising funds before the phase-out of subsidies for wind and solar projects is smart even if it will take the outfit more time to be cost-competitive with coal. A strong parent will help support the sale.

Corona Capital: Oil cheerleading, Mortgaging Ford

13 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. and Saudi energy ministers agree on pumping up oil, Ford may use an old trick to raise new capital.

OPEC throws sand in wheels of oil’s runaway train

9 Apr 2020

The producer group and allies like Russia are set to knock one-tenth off global daily oil output. The cut, which could rise if other countries agree to join in, might start draining the epic glut holding down prices. But it won’t do much if the Covid-19 demand slump persists.

Saudis’ Warren Buffett impression looks skin-deep

9 Apr 2020

The kingdom’s wealth fund looks to be ditching diversification by snapping up stakes in big European oil groups. Unless MbS knows something that others don’t, buying stock on the open market is riskier than a classic Sage of Omaha swoop. Oil groups may also be cheap for a reason.

Oil producers face their moment of truth

9 Apr 2020

After sparking a destructive price war last month, Russia and Saudi will discuss output cuts. Failure to agree could see supply bust through storage limits, sending prices below $20 a barrel. But, as a Breakingviews calculator shows, the required reductions are unprecedented.

Climate fight at Mizuho previews wider clash

9 Apr 2020

An investor group is urging the $29 bln finance giant to reduce lending for coal. With Japan in a state of coronavirus emergency, it’s an odd time to pick this battle, nor is Mizuho in charge of national energy policy – the real problem. But activists have to start somewhere.

Brazen Trump oil claims may yet fire partial deal

2 Apr 2020

A day before meeting with beleaguered U.S. crude-industry execs, the American president predicted an epic supply cut by Saudi Arabia and Russia. Yet he may only need a chunk of the 10 mln barrels a day reduction he’s hoping for to keep the U.S. shale industry from total collapse.

Big Oil might be a weird stock market haven

2 Apr 2020

Shares in the world’s big five listed crude producers are down by over a third since January. Yet despite the global oil slump, their dividends look secure for now. Rock-bottom prices would have to last well into 2021 for credit ratings or payouts to be in serious doubt.

Corona Capital: Uncle Sam’s penchant for boutiques

2 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. The U.S. government has given a boost to independent investment banks by hiring Moelis. Perella Weinberg and PJT are its bailout advisers. Megabanks like JPMorgan and Goldman Sachs, meanwhile, are left on the shelf.

Corona Capital: GE, Oaktree, M&A back doors

1 Apr 2020

Concise views on the pandemic’s corporate and financial fallout. GE delivers its own form of cash injection, hedge fund boss Howard Marks praises heavy-handed Covid-19 responses, and a car-parts maker flirts with bailing on a deal.

Rosneft Venezuela exit is not as good as it looks

30 Mar 2020

The $41 bln oil giant is selling its operations in the country to the Russian state to avoid more sanctions. Moscow is making a generous share payment but in practice keeps voting control. It’s a cheap way for the government to protect a key asset and send a message to the U.S.

Strong dollar hits renewables when they’re down

30 Mar 2020

Plunging oil prices have already made wind and solar power less attractive. But a coronavirus-led weakening of emerging market currencies also pushes up the dollar cost of new projects. That puts a brake on growth just when the opposite is needed to hit carbon reduction targets.

Oil storage crisis is new threat to OPEC

25 Mar 2020

The double whammy of a Saudi Arabia-led price war and a virus-fuelled collapse in demand points to a huge oversupply of crude this year. Space to store the surplus may run out at this rate. If that’s exhausted, a barrel of the commodity could soon be worth less than $20.

Oil price war bolsters case for U.S. renewables

24 Mar 2020

The Saudi-Russia black-gold spat has drilled a hole in American energy suppliers’ finances and the country’s hopes for energy independence. Bailing out fossil-fuel companies is an option, but a more decisive switch to cleaner energy could make self-sufficiency an attainable goal.

U.S. bailout needs fewer diversions, more speed

24 Mar 2020

Lawmakers are wedging non-Covid-19 concerns into the stimulus bill. Some are worthy causes, like getting airlines to cut emissions. But the $2 trln-odd rescue package’s goal should be to get aid where it’s needed fast. As the 2010 Dodd-Frank Act showed, broader issues can wait.

Trump can make oil markets balance in his favour

20 Mar 2020

To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.

Cheap gas drives auto industry to distraction

19 Mar 2020

With crude oil futures near $26 a barrel, drivers might lose enthusiasm for electric vehicles if governments put support on hold and let pump prices free-fall. But the push away from hydrocarbons is about more than petrol costs. Carmakers are ill-advised to let investment slide.

Oxy victory would help Icahn’s poor oil-patch rep

12 Mar 2020

By raising his stake in Occidental Petroleum, the activist has upped the odds of getting his way, or reaching a truce. It helps that his demands – a new CEO and a sale of the company – both make sense. A trail of rocky energy investments means Icahn could use a high-profile win.

Viewsroom: Oil shock

12 Mar 2020

A major rift between Saudi Arabia and Russia has sent oil prices plummeting just as the Covid-19 outbreak saps demand. The fallout is pummeling U.S. shale producers and calling traditional energy-security concepts into question. Plus, market fallout in Japan, China and India.

Occidental divi cut puts Buffett in driver’s seat

10 Mar 2020

The oil driller slashed its payout in response to crude prices plummeting. That is the last straw for CEO Vicki Hollub, who staked her credibility on a debt-fuelled purchase of Anadarko. Oxy now looks like an appealing M&A morsel, though all hangs on kingmaker Warren Buffett.