Energy

How Europe can square the circle on green economy

1 Aug 2023

Shifting away from fossil fuels is an opportunity for the bloc, argues economy tsar Paolo Gentiloni in this Exchange podcast. But it will have to overcome challenges, such as US competition for investment and the EU’s own narrow set of financial tools.

Capital Calls: Uber’s road trip to redemption

1 Aug 2023

Concise views on global finance: The $95 bln ride-sharing firm notched its first operating profit and more than doubled free cash flow, but its valuation is lagging.

Capital Calls: Mastercard vs. weed

27 Jul 2023

Concise views on global finance: The credit card company wants to end cannabis purchases on its debit cards. It took a similar stance with adult content site Pornhub. In the end, pot smokers will find a workaround.

Shell may as well try green plug for valuation gap

27 Jul 2023

The $204 bln group’s shares have outperformed US rivals since it flagged a renewed focus on oil, but still lag Chevron and Exxon Mobil. New boss Wael Sawan could try to close the gap by listing his green energy bits. It’s not certain to work, but is better than more buybacks.

Glencore deal epitomises net zero’s reduced status

27 Jul 2023

The $75 bln miner used to argue it was better to wind down its coal assets than sell them to a less responsible owner. Now CEO Gary Nagle wants to buy a rival and spin off the enlarged coal unit. Investors, distracted by energy security and fat profits, are unlikely to stop him.

Fading Russia windfall will test Ambani’s ambition

24 Jul 2023

Earnings at the Indian tycoon’s $210 bln Reliance disappointed. The high crude refining margins driven by the dislocation in energy markets are evaporating. As weak global demand bites, scrutiny will intensify on the conglomerate’s newer consumer-facing businesses.

Robin Hood tariff could curb airline emissions

24 Jul 2023

The aviation industry doesn’t pay duty on fuel despite causing 4% of global warming. A tax would promote cleaner energy and raise billions of dollars, but poor countries oppose it. Rich nations could break the logjam by giving some proceeds to the less well-off, says Hugo Dixon.

UK is in danger of becoming the Nigeria of wind

20 Jul 2023

Ex-PM Boris Johnson wanted Britain to be for green energy what Saudi Arabia is for oil. Yet Vattenfall is halting a key offshore wind scheme, and it’s not clear if the UK will let developers hike prices to offset soaring costs. The more apt OPEC comparison is output-hit Nigeria.

Warren Buffett flaunts his green investment thumb

17 Jul 2023

Berkshire Hathaway is paying $3.3 bln for control of a liquefied natural gas facility. The conglomerate’s utilities now account for about half the conglomerate’s capex. Regulated returns help, but the Oracle’s funding devoted to energy transition should be a sign to laggards.

European gas security rests on a fragile balance

14 Jul 2023

Mindful of last summer’s mad price rally, EU states have lots of the fossil fuel in storage. This, plus higher Chinese purchases, may keep European contracts below Asian ones. But that may prompt US cargoes of liquefied gas to head East, lifting European gas prices again.

BP’s German wind option risks multiple blowbacks

13 Jul 2023

The UK oil major and TotalEnergies have won Berlin’s $14 bln auction to boost green power, helping all three hit wind capacity targets. But the winners only have to pay 10% of the cost in the short term. Given the high prices offered, the risk is the projects don’t get built.

How to crack the climate free rider problem

10 Jul 2023

One reason countries fiddle while the world burns is that they bear the costs of action while everyone benefits. Creating a “climate club” would incentivise nations to pull their weight. But a lot of geopolitical stars first need to align, says Hugo Dixon.

Capital Calls: Diverse workforces

5 Jul 2023

Concise views on global finance: The court’s ruling against affirmative action could make future workforces more homogeneous. That’s a bitter pill for the US Federal Reserve, which has pushed for a more inclusive labor market.

El Nino will brew up potent new economic storm

4 Jul 2023

The Pacific Ocean phenomenon is back. Resultant floods, heatwaves, water scarcity and fires will damage crops and infrastructure, may cost trillions, and augur inflation and rate hikes. Worse, climate change makes such events stronger and more frequent, embedding supply shocks.

Peak oil is another reason to shun OPEC club

26 Jun 2023

The oil-producing organization wants Guyana to join, but the tiny South American nation prefers to pump while it can. Cartels are difficult to maintain at the best of times because members can cheat. When future demand is finite, there’s even less incentive to cooperate.

Elliott asks too much too soon at NRG

23 Jun 2023

The activist wants the CEO of the $8 bln utility to go, in its second campaign against the company. Both sides see the need for cost cuts, returning capital and refreshing the board. Elliott’s worries about acquisitions are reasonable too. But it’s not yet time for heads to roll.

Capital Calls: Canada is calling Meta’s bluff

23 Jun 2023

Concise views on global finance: The Facebook owner plans to pull news on its platforms in Canada after the country passed a bill that requires internet giants pay publishers. If Australia is any guide, Meta will eventually cave.  

Eni’s bet on gas comes at an acceptable price

23 Jun 2023

The Italian group and Var Energi, in which it holds a 63% stake, are buying Neptune Energy for $4.9 bln. The seller’s private equity owners once hoped for an IPO at twice that level. Bulking up in fossil fuels carries risks, but Eni’s price at least creates some sort of buffer.

Green alliance crisis is more than just a US drama

19 Jun 2023

Most insurers have quit their industry’s UN-backed climate body. Sector specifics and fear of US lawsuits partly explain why, but so do European governments focusing on energy security rather than net-zero targets. The same dynamic may affect banks and fund managers.

Capital Calls: Oil M&A, Bud backlash, L&G’s CEO

15 Jun 2023

Concise views on global finance: Two oil-well servicers find a way to make decline more palatable, while brewer Anheuser-Busch discovers that money doesn’t always buy friends in politics. In the UK, insurer L&G picks a new CEO to try and address its Brexit discount.