Fossil Fuels

Shell’s Dutch exit comes with legal side benefits

15 Nov 2021

Shifting its tax residency to the UK, along with its head office and CEO, simplifies the $170 bln oil major’s structure. It also makes it easier to reorganise for the energy transition. The implied snub to the Dutch court which ordered Shell to cut emissions is an added bonus.

Capital Calls: Google, Twitter, Swedish grocer

10 Nov 2021

Concise views on global finance: The search giant’s defeat in appealing a $2.8 bln EU fine is tolerable if American judges don’t follow; the social media network hopes to charge hardcore U.S. users a monthly fee; ICA Gruppen’s top shareholder takes the $12 bln retailer private.

Rolls-Royce nuclear plans piggyback green success

9 Nov 2021

The UK engineer and partners are pumping 195 mln pounds into a unit to build small commercial reactors. As with wind and solar, the British government is helping by promising to buy the plants’ electricity. It should mean a lucrative side hobby for the group run by Warren East.

Shell’s Loeb parry uses cash, capex and chutzpah

28 Oct 2021

The $190 bln oil major needs to deflect activist Third Point’s call to split itself up. High crude prices make it easier to promise fat cash returns and invest more in green energy. Given Shell should have done that anyway, fending off Dan Loeb also requires a certain brass neck.

Capital Calls: Fantasy-sports group M&A flop

26 Oct 2021

Concise views on global finance: DraftKings has walked away from Entain but the UK target may still attract interest.

UK’s net-zero bill is less painful than it looks

20 Oct 2021

Britain’s pre-COP26 investment pledges augur ill for securing up to 60 bln pounds a year of mostly private capital to cut CO2 emissions. Yet unlike peers, it now has a solid net-zero strategy. If that wins over investors, other states may decide to offer similarly clear roadmaps.

Higher gas prices are a long-term corporate thorn

13 Oct 2021

It’s tempting to dismiss soaring values of the fossil fuel as another temporary spike. But prices will stay elevated in the short term, while supply may keep falling short of demand in the longer run too. Sensible businesses should plan for higher energy bills.

Eni’s green listing shows appropriate restraint

12 Oct 2021

The $50 bln Italian oil major’s renewables IPO may value it at 10 bln euros. Recent efforts by rivals don’t inspire confidence, but Eni’s offer blends a nascent green power business with its more established energy retail arm. That should get takers at a more modest valuation.

Capital Calls: Green investors, ASOS, Renren

11 Oct 2021

Concise views on global finance: Al Gore’s asset manager finds listed equities can influence a larger chunk of global emissions; the online retailer parts company with its CEO; the startup investor’s $300 mln settlement with aggrieved investors is likely to be an exception.

Chancellor: Going green is everything except easy

6 Oct 2021

British Prime Minister Boris Johnson told the United Nations just weeks ago that transitioning to a carbon-neutral economy would be a cinch. Oops. The global energy crisis changes everything. Not least, it makes the cost of jettisoning hydrocarbons a great deal more expensive.

Funky hedging is a way for states to ease gas woes

6 Oct 2021

Countries caught by fuel-price spikes have no quick means to create alternative supply. As a result, they may be tempted to use public cash to buy options on gas a few years hence. It would waste taxpayer money if prices dropped, but sustained inflation would cause a mess too.

Cox: How Greta can transition from blah blah blah

4 Oct 2021

The young Swedish climate activist grabbed headlines in Milan at the runup to COP26 last week, castigating “so-called leaders” for talking much and acting too little. She’s got a point. But generational resentment won’t halt global warming. She’d be better off going nuclear.

Capital Calls: U.S. debt, Hollywood, Blue Prism

28 Sep 2021

Concise views on global finance: Republicans have blocked additional federal borrowing, bringing a default closer; talent agencies CAA, ICM, and Endeavor take different strategic directions; private equity group Vista seems to be getting UK software group Blue Prism cheaply.

UK trucker shortage tows inflation in its wake

27 Sep 2021

The government is recruiting foreign drivers, suspending competition rules and may use the army to ease a fuel crunch which triggered panic buying. That should limit the hit to Britain’s road-dependent economy. But sharply higher wages will accelerate annual inflation towards 4%.

South Africa is litmus test for climate solidarity

15 Sep 2021

Despite its relatively small size, the Rainbow Nation’s economy is a big CO2 emitter. Yet Pretoria can ill afford a switch from coal due to soaring public debt. A $10 bln aid plan could be the answer, if lenders can close their eyes to the financial and political risks.

RWE makes for a good coal wind-down guinea pig

10 Sep 2021

The 22 bln euro German utility’s new activist wants it to ditch carbon-intensive lignite assets faster. If the government wants to hit tougher CO2 emissions targets, RWE will have to. The least-bad way forward may be for Berlin to assume the offending power plants itself.

Viewsroom: Battling the climate emergency

12 Aug 2021

A new U.N. report on global warming gives financiers fresh reasons to take bigger steps to help avert or mitigate the consequences, Breakingviews editors argue. A plan by the UK’s Prudential and the Asian Development Bank to close coal-fired power stations offers a model.

Aramco’s tricky balancing act gets easier

9 Aug 2021

The Saudi oil giant’s ultimate boss, Crown Prince Mohammed bin Salman, wants it to help fund the kingdom’s pivot away from crude. A strong first half makes it easier to do that and pay dividends. Unlike last year, Aramco can also meet its various demands without debt spiking.

BP’s oil price boon is a mixed blessing

3 Aug 2021

Rising crude values allowed the $84 bln UK group to raise its payout and give CEO Bernard Looney more funds to pivot away from fossil fuels. But the bonanza could focus investor minds on less speedy rivals with scope to pay higher dividends, like Shell. That may hurt BP’s appeal.

Big Oil’s generosity has limited shelf life

29 Jul 2021

Royal Dutch Shell and Total will return billions of dollars to investors. High crude prices mean they can cut debt, invest in green energy and crank up payouts. Such largesse may get harder given growing pressure to cut emissions. Prudent payouts will limit future disappointment.