Energy

Gazprom bid for Greek gas puts EU in a bind

15 Jan 2013

Brussels might not like that Gazprom and a little-known Russian power group are lead contenders in a Greek gas privatisation. But with Grexit fears lurking, it’s no wonder the sale hasn’t attracted more buyers. An unusual example of self-defeating policies at work.

Venezuelan political folly is a cue for investors

10 Jan 2013

Allies of ailing Hugo Chavez seem to be taking even greater liberties interpreting the constitution than expected. There’s no inauguration, caretaker government or sign of a new election. If markets truly hate uncertainty, then animus toward Venezuela should be off the charts.

Brazil’s power troubles dim economic prospects

9 Jan 2013

A bad drought could require electricity rationing. Brazil is already battling weak investment and higher labor costs as it prepares to be a global sports host. The 2001 energy crisis sapped 2.6 points of GDP growth. Dilma Rousseff’s troubleshooting list is getting awfully long.

Governance fixes don’t let Chesapeake CEO off hook

9 Jan 2013

New directors are cutting back outsized pay and perks at the U.S. gas driller. But cleaning house is separate from holding boss Aubrey McClendon to account for dodgy personal dealings. The only credible result of a lengthy board probe into conflicts of interest would be his exit.

Chesapeake sets unlikely governance reform example

8 Jan 2013

The U.S. gas firm’s revamped board slashed CEO Aubrey McClendon’s bonus to zero and reined in other perks. They’re overdue steps for Chesapeake, which has a long way to go to restore credibility. Still, there’s hope for similarly abused shareholders elsewhere in the oil industry.

Oil barons and tech hipsters share a dark side

7 Jan 2013

They seem so different. But SandRidge’s CEO and some peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors. The oil business may prove easier to clean up.

Macondo spill cost Transocean more than money

4 Jan 2013

The U.S. oil services firm will pay Uncle Sam $1.4 bln for its role in BP’s Gulf of Mexico disaster in 2010. That’s a modest sum. But shares in the $18 bln Transocean have lagged those of rivals in the meantime as it avoided heavy investment. It has a lot of catching up to do.

Coal’s ascendancy to leave ailing U.S. miners in pit

28 Dec 2012

The black rock is set to replace oil as the world’s top energy source within five years. America sits on 28 pct of the planet’s coal. But geriatric mines and poor transport will prevent the U.S. industry profiting from the boom. Australian and Indonesian miners are better placed.

Gazprom’s travails encapsulate Russia’s problems

28 Dec 2012

For decades, Gazprom’s grip on EU gas supplies made it a key lever of Russian might. But years of mismanagement have taken their toll. What’s more, gas isn’t what it used to be. The new torch-bearing company may be Rosneft. But Russia remains a badly-managed resource economy.

U.S. doesn’t need Washington for economic stimulus

27 Dec 2012

President Obama’s planned one-time jolt has been stymied. But a divisive corner of the energy industry has many hallmarks of a boost to the nation’s wallets. Shale oil and gas production pumped $140 bln into 2012’s economy. It won’t cure America’s ills, but it can ease the pain.

Mexico may teach U.S. a lesson on good government

26 Dec 2012

The country needs fiscal and energy sector reform. Its rival political parties have little history of working together, so that might sound hard. But they look set to reach a compromise with far less rancor than their counterparts north of the border.

Fading power of oil autocrats will aid growth

24 Dec 2012

Democracies are starting to outclass countries like Iran, Venezuela and Russia in energy production. That should reduce the economic and political influence of such authoritarian states. The West’s booming output should steady fuel prices, a rare boon for the global economy.

Brazil’s ailing oil industry needs a nudge

13 Dec 2012

Petrobras can’t meet output targets. The fallout from Chevron’s spill is making it hard for companies to hire. And Eike Batista overhyped OGX, whose value has plummeted. The country’s once-promising oil bounty is going to waste. A revival may need fresh thinking from Brasilia.

SolarCity IPO valuation approaches earth

12 Dec 2012

The U.S. solar panel installer slashed its expected sale price by more than 40 pct at the last moment. The old price, some six times 2012 revenue, always looked starry-eyed - even with the involvement of Tesla guru Elon Musk. The new price merely requires optimism.

Corporate carbon bubble may start to deflate

12 Dec 2012

Science points to the potential for climate shocks in burning through just current proven oil, gas and coal reserves. Stock-market valuations of miners and oil groups don’t reflect the risk of a policy response. In 2013, investors may wake up to a carbon-constrained future.

Mexico’s new president cools energy reform hopes

3 Dec 2012

A day after taking office Enrique Peña Nieto signed a pact with three political parties, committing them to reforms. That’s good, but the deal limits liberalization of the energy sector. Pemex asset sales, for example, are off the table. The needed overhaul looks a long way off.

SandRidge CEO sets bar even lower for oil patch

3 Dec 2012

Tom Ward isn’t the first energy boss to live large at shareholders’ expense. But his record at $3 bln SandRidge would make TV’s J.R. Ewing blush. Aside from lavish pay since the company went public, the CEO has upgraded to a fleet of jets. Angry owners are right to want him out.

US utility watchdogs should flex muscle more often

30 Nov 2012

A state regulator has forced Duke boss Jim Rogers to retire after he pushed out the intended CEO following an $18 bln merger. The episode shows watchdogs’ power. A better use of it would be ensuring electric and gas monopolies invest enough and don’t abuse captive customers.

Musk elan powers SolarCity IPO valuation

28 Nov 2012

The solar panel installer backed by Tesla’s billionaire founder is clouded by complex accounting and government-related risks. The mooted share price puts SolarCity at six times revenue, far exceeding what similar business models elsewhere fetch. Elon Musk moon dust costs extra.

Conoco’s $5 bln Kazakh sale is the easy part

26 Nov 2012

The U.S. oil giant’s investors should be happy to see the costly Asian project go. The cash also will help fund lavish capex plans and the generous dividend. But Conoco’s real chore is to prove it can boost sluggish output while retreating from promising, if risky, regions.