Energy

Britain is tossing aside its last green trump card

20 Sep 2023

PM Rishi Sunak may defer UK targets for electric vehicles and eco-friendly houses. Juicy US subsidies had already dented Britain’s claims to net-zero leadership, but political backing was a clear signal for green investment. Watering that down is an act of financial self-harm.

Aussies may let $20 bln burn Brookfield’s pocket

19 Sep 2023

It’s what the Canadian investor wants to plough into renewables once it co-buys Origin Energy for $12 bln. But a big shareholder in the power company wants a higher offer. And the country’s antitrust watchdog may nix the deal, capping CEO Bruce Flatt’s climate options Down Under.

BP succession fail puts spotlight on its board

14 Sep 2023

Chair Helge Lund and his colleagues could have lined up a replacement for now-departed boss Bernard Looney when issues over his conduct surfaced last year. They didn’t. Before rushing to appoint a new CEO at the $110 bln oil group, they should interrogate their own performance.

BP CEO’s exit brings strategic impasse to a head

13 Sep 2023

Bernard Looney quit as the $112 bln oil group’s boss over past relationships with colleagues. BP shares lagged rivals during his tenure due to an ill-timed pivot to green energy. His replacement will have to decide whether to stick with the strategy, or pivot back to oil and gas.

Time to target fossil fuel demand, not supply

11 Sep 2023

Climate activists want countries and companies to stop producing oil, gas and coal. It would be more effective to focus on cutting demand for fossil fuels – by campaigning for carbon taxes, green subsidies and faster licences for renewable energy, says Hugo Dixon.

Brookfield’s climate promise faces a dirty test

8 Sep 2023

The investor’s pending $12 bln co-purchase of Origin includes Australia’s largest coal plant. Fear of blackouts may keep it running past an expected 2025. Even with deep pockets and oodles of renewables expertise, it may be hard to avert such an epic energy transition fail.

Orsted is losing big in wind’s political lottery

6 Sep 2023

The $23 bln group has shed a third of its value since flagging $2 bln in US impairments last week. Orsted is not the only offshore wind player wanting states to sweeten subsidies. But its threat to quit projects if that doesn’t happen might leave it without a valid rebound story.

Orsted’s issues fan way beyond the United States

30 Aug 2023

Denmark’s $27 bln wind giant saw shares plunge over 20% after it said it may need to write down $2 bln of US projects. Yet Orsted’s supply chain and subsidy problems may also upend progress in the UK. And by recently implying all was well, management has lost credibility.

Aussie gas strike risk has market fighting old war

24 Aug 2023

Possible industrial action on key rigs added 41% to the fossil fuel’s European price. Yet with storage nearly full, it trades at a fraction of last year’s peak. Real fear of a new supply crunch would lift it far more. No wonder Woodside and Chevron are taking talks to the wire.

OPEC’s oil sweet spot may not last long

11 Aug 2023

Crude prices have risen some 20% since the cartel and Russia extended supply cuts in June. The spike owes much to falling inflation and hopes of a soft landing. Yet risks around China and US growth persist, and seasonal demand will soon fade. Oil producers may need to do more.

Capital Calls: PIF, Siemens Energy

7 Aug 2023

Concise views on global finance: Saudi Arabia’s big sovereign wealth fund is getting bigger; the $13 bln German company unveiled a $2.4 bln charge due to persistent wind turbine problems.

UK net-zero ‘pragmatism’ is an odd way to get real

4 Aug 2023

PM Rishi Sunak says he cares about decarbonisation, but is also signing off new oil schemes. Uncertain energy transition costs make that a logical political strategy. But the government’s own data suggest relying on volatile gas over renewable power could be an expensive mistake.

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.