Energy

Big Oil’s old profligacy lives on Down Under

15 Mar 2023

Chevron, Shell and others are ploughing some Ukraine-related windfall earnings into new projects, but sharing the lucre with shareholders too. Australia’s Santos is being stingier, with governance and climate concerns to boot. Its lagging stock is dry powder for activists.

EU power rejig may only solve tomorrow’s problem

14 Mar 2023

Spooked by the 2022 gas crisis, the European Commission wants to boost long-term electricity contracts at fixed terms to shield consumers. That’s wiser than splitting the whole power market. Yet while it might aid green investment, it won’t curb prices in the short term.

Capital Calls: Ritchie Bros founder regret

13 Mar 2023

Concise views on global finance: The industrial equipment auction company’s $7 bln deal for scrap-yard operator IAA has drawn one last opponent: the company’s own co-founder.

Germany’s electricity headache has an M&A cure

6 Mar 2023

Berlin may spend over 20 bln euros on the local unit of Dutch-owned TenneT. Every country’s power grid needs an overhaul to make it fit for the green transition, but Germany’s need is especially pressing. Still, relatively low debt also makes it easier to take swift action.

Capital Calls: Adobe’s lose-lose Figma bind

24 Feb 2023

Concise views on global finance: Shareholders in the $160 bln design technology firm seem to have decided that the only thing worse than doing its blockbuster deal for rival Figma is losing it.

Ukraine’s long shadow on business and geopolitics

23 Feb 2023

It’s been 12 months since Russian President Vladimir Putin’s bloody invasion. In this Viewsroom podcast, Breakingviews columnists discuss how energy markets have changed for good, how defence companies are benefiting, and another potential conflict troubling CEOs and investors.

Capital Calls: World Bank, Bumble, Wood Group

23 Feb 2023

Concise views on global finance: The U.S. picks ex-Mastercard boss Ajay Banga to run the multilateral development bank; while the dating app’s shares are down, private equity owner Blackstone is still in the money; the UK oil services group has turned down three bids from Apollo.

UAE gas IPO’s $50 bln valuation looks like a floor

22 Feb 2023

The Emirates’ energy giant ADNOC is selling at least 4% of its gas processing arm via an Abu Dhabi listing. As with Saudi Aramco, buyers will have to put up with minimal say on strategy. Unlike Aramco’s IPO, the mooted $50 bln valuation may be an underestimate.

Energy transition’s $12 bln deal becomes forex bet

22 Feb 2023

Brookfield and MidOcean have reduced their offer for Australia’s coal and gas-heavy Origin Energy, but only by 1%. Large investors also will be paid partly in U.S. dollars. If exchange rates move only slightly, it would more than compensate them for the price cut.

Chevron’s CEO short-termism has benefits

13 Feb 2023

The $330 billion oil giant may extend head Mike Wirth’s contract beyond guardrails. He’s focused on fossil fuels, suggesting Chevron doesn’t plan to pivot. But deals are on the horizon, including maybe with a European firm. His discipline could make him the last one standing.

UK bailout has energy bosses walking on eggshells

13 Feb 2023

Power suppliers like Centrica took billions of pounds of government cash to help customers pay high bills. That leaves them open to charges they pocketed gains and handed losses to taxpayers. For an industry intertwined with the state, pay restraint is vital to self-preservation.

Hydrogen is elemental to U.S.-EU green compromise

10 Feb 2023

Joe Biden’s Inflation Reduction Act has raised fears of a transatlantic subsidy spat. The sustainably produced version of hydrogen may be a way to de-escalate tensions. Because it’s a potential jobs engine rather than a current one, both sides have scope for a face-saving deal.

IMF’s outlook on Russia is too rosy to be true

10 Feb 2023

The International Monetary Fund expects the Russian economy to avoid a recession this year after contracting by 2.2% in 2022. That is much more optimistic than Moscow’s own forecasts. Unless oil prices stage an improbable rally, investors should trust the locals’ gloomier view.

TotalEnergies’ India squall hits at a tricky time

8 Feb 2023

France’s $154 bln group has put a hydrogen project with Gautam Adani on hold as he battles short-seller allegations. Total’s Indian exposure is bearable. But it highlights green execution risk just as investors question companies trying to combine renewables and fossil fuels.

Brookfield’s $13 bln climate power play may trip

8 Feb 2023

The asset manager and partner MidOcean want to cut their offer price for Origin Energy, AFR reports. Gas rules are in flux and shares 20% off the bid, supporting a reset, but the target is boosting its earnings outlook. Too much resistance risks short-circuiting a good thing.

Capital Calls: SoftBank, BP

7 Feb 2023

Concise views on global finance: Masayoshi Son’s $69 bln technology investor is out of ammunition when it needs it most; the $108 bln British oil group’s pledge to pump more of the fossil fuel may not boost its lowly valuation.

China energy rethink can keep Europe warm

7 Feb 2023

A post-Covid economic rebound will increase Beijing’s appetite for liquefied gas. Yet a government push to use more coal and higher imports of pipeline gas from countries like Russia should keep demand 14% below a 2021 peak. That could ease the energy pain for gas-hungry Europe.

Green subsidy race may be what the world needs

6 Feb 2023

High carbon taxes would be the best way to combat climate change. In their absence, subsidies are a good second best. As the global elephants – the U.S., EU and China – roll out financial aid, the key will be to ensure some fair play so others don’t get trampled, says Hugo Dixon.

China ban would slow, not halt, Western solar push

3 Feb 2023

Reacting to the chip war, Beijing may ban the export of technology for making solar panels, a $235 bln sector it currently dominates. Yet the West already has green energy know-how. Creating a rival industry without Chinese expertise may be slower and costlier but not impossible.

Big Oil mega-deals would put investors on the spot

2 Feb 2023

Shell and BP are printing money but have rock-bottom valuations. Punts by U.S. giants Exxon Mobil or Chevron are financially viable, if politically tricky. European shareholders may face a tough choice: sell out to a less green rival, or hope that risky renewable bets pay off.