Fossil Fuels

Oil swoon entrenches BP’s strategic quandary

4 Feb 2020

The UK oil major delivered decent 2019 results on CEO Bob Dudley’s last day. New broom Bernard Looney is taking over an improved balance sheet and a hiked dividend. But the virus-led crude price slump makes it harder for him to steer the group away from harmful carbon emissions.

Shell faces slog to keep least-bad oil major title

30 Jan 2020

The Anglo-Dutch group’s emissions stance is tougher than peers, but rivals like BP may soon catch up. Shell could hold its lead by further embracing lower-yielding renewables. Yet that might add to pressures obliging CEO Ben van Beurden to slow the pace of a $25 bln buyback.

Virus panic makes OPEC cat-herding even harder

28 Jan 2020

Oil prices have dipped below $60 a barrel on fears the coronavirus will hit growth. The Saudi-led producers group already has a job convincing the likes of Russia to keep supporting cuts agreed in December. The virus jitters might make others, such as Riyadh, want to double down.

Investors and EU can marginalize U.S. on climate

27 Jan 2020

Commerce Secretary Wilbur Ross says the White House might deem a European carbon tax on imports protectionist. That exposes one of the problems with regional solutions to global warming. Allying with global investors would help create more powerful sticks and carrots.

M&A bankers will turn climate risk into clients

19 Dec 2019

The financial impact of global warming is one of the biggest strategic issues CEOs face, yet it plays a small role in dealmaking. That might change in 2020 as shifting regulation and consumer habits start to affect the bottom line, giving climate-conscious advisers an edge.

Viewsroom: WeWork’s future may lie in China’s past

24 Oct 2019

Beijing-based Kr Space switched from renting out space held on long-term leases to selling services after the shared-office market crashed. Following suit may help WeWork stem losses. Also: climate change and Canada’s election. Plus: the gloomy IMF and unrest in Latin America.

Climate strikes give governments cover to act

20 Sep 2019

Millions are downing textbooks and tools to demand more action against global warming. People power fueled a mass aversion to plastic. And many ideas and financing vehicles to enable the climate fight already exist. The worldwide protests allow politicians to take a tougher line.

Growing money on trees beats fossil-fuel returns

30 Aug 2019

Reforestation improves the management of water, soil and crops as well as storing carbon. It can also yield investment returns higher than Exxon and most of the other top 100 emitters of greenhouse gases manage. Especially with the Amazon rainforest ablaze, it merits top billing.

BP investors take the slow road to climate action

21 May 2019

Shareholders endorsed greater disclosure of the oil major’s compatibility with Paris climate goals, but rejected binding targets. It’s a start, but hardly matches the scale of the problem. Both BP and its owners appear unsurprisingly happy to wait for greater political urgency.

Oil market constrains Trump’s Iran war talk

21 May 2019

The U.S. president’s belligerent stance towards Tehran belies his dislike of costlier crude. While Saudi Arabia could increase output, it’s an imperfect hedge to the squeeze that would follow a conflict. Tight supply means Trump has little leeway for more than sabre-rattling.

Conoco escapes squeeze on Big Oil’s golden goose

26 Jul 2018

Infrastructure bottlenecks are depressing oil prices in America’s resource-rich Permian Basin. New pipelines should be running by next year if labor and steel problems don’t cause delays. While the $84 bln Conoco’s U.S. business is holding up, others may not be so fortunate.

BHP Permian sale hits reset on regional boom

9 Jul 2018

The mining giant is looking to offload shale assets in the West Texas area. A mooted price of around $10 billion suggests valuations are starting to drop. The Permian’s global clout remains, but until producers can fix pipeline bottlenecks, a more measured approach makes sense.

Aramco IPO retreat would leave few losers

6 Jul 2018

Pinning a $2 trln valuation on a company worth $1.6 trln was always going to be risky for the Saudi oil giant’s bankers. If Aramco’s IPO is scrapped, they may get another bite at a more modest cherry. It would, though, sting regulators who bent over backwards to accommodate it.

Vivo Energy offers pricey road to African growth

24 Apr 2018

The operator of 1,800 fuel stations across the continent is planning a stock market listing that values it at up to $3.3 billion. Earnings growth is healthy, and the company has scale. But a comparison with smaller regional rivals suggests the premium price tag is a stretch.

OPEC’s widened tent would still be built on sand

16 Feb 2018

Oil-exporting countries are working to expand their alliance with Russia and others longer term, the UAE oil minister says. That’s just as production numbers show U.S. drillers are set to pump more oil this year. OPEC’s tent can widen, but it will still face a production gale.

Saudi needs OPEC cuts to work, but not too well

30 Nov 2017

The oil cartel agreed to extend cuts until the end of 2018. Its moderation has drained inventories and lifted prices. Further cuts won’t boost prices enough to balance Saudi’s budget. Then again, that gives the crown prince a reason to continue with his challenging reforms.

China is third-best option for Saudi Aramco

16 Oct 2017

With its $2 trln public offering in the balance, the Saudi oil giant may bring in a Chinese investor. That would provide cash the state doesn’t urgently need. The other perks of an international IPO, like regional influence and financial discipline, aren’t to be found in Beijing.

Uniper bid lacks spark for all bar E.ON

20 Sep 2017

Finnish utility Fortum’s plan to buy its German rival for 8 billion euros may create more losers than winners. Uniper's top shareholder E.ON has reasons to accept a 4.5 percent premium but its other investors will rightly grumble. Nor does the deal make much sense for the bidder.

Shell’s defence of big oil is too hopeful

11 Sep 2017

The Anglo-Dutch giant reckons demand will peak around 2030, but says crude oil will continue to play a major role in global energy supply thereafter. It’s a view that puts too much faith in the combustion engine’s survival – and China staying with its current course.

Glencore’s debt purge creates enviable problems

10 Aug 2017

Surging commodity prices are helping Chief Executive Ivan Glasenberg to slash debt faster than planned and restore profitability. That gives the mining giant scope to hand more money back to investors or make bigger bets on growing demand for resource-hungry electric vehicles.