Fossil Fuels

Boris Johnson has Europe’s biggest energy headache

7 Jan 2022

Customers across Europe are braced for higher utility bills, prompting governments to divide the pain between users, suppliers and the state. But Britain faces the biggest hike and has done the least to cushion the blow. That makes the prime minister’s position more perilous.

Pricey oil gives Kazakh investors emergency cover

7 Jan 2022

Russia sent troops to quash a revolt in its neighbour. Even if President Tokayev keeps his job, energy majors like Chevron and Shell will fear fallout from the unrest. With the state reaping the rewards of oil at $80 a barrel, there’s less incentive to renegotiate their terms.

EU’s anti-greenwashing crusade takes a risky turn

5 Jan 2022

The bloc’s new draft of its green taxonomy includes gas and nuclear power. The risk is a tool intended to make sustainable financing less prone to greenwashing does the opposite. A lot hinges on whether investors properly differentiate between clean and “transition” activities.

Nordic $20 bln deal sets high bar for oil mergers

22 Dec 2021

Aker BP is acquiring Lundin Energy’s fossil fuel assets using cash and stock. Both sides emerge with a stake in a low-cost big hitter, better able to negotiate oil’s decline. The billionaire Lundin brothers get a smoother path out of the sector, and arguably a small premium.

Europe tightens energy noose round its own neck

17 Dec 2021

Germany will not certify Nord Stream 2 until the second half of next year. The Baltic pipeline is a hugely flawed solution to Europe’s energy security shortcomings. But the main losers from delaying its launch are likely to be its own consumers, rather than Russia or Gazprom.

Fortescue unearths transition leadership challenge

10 Dec 2021

The Aussie miner’s CEO will step down, a year after Chairman Andrew Forrest unveiled his bold green-hydrogen plans. Straddling iron ore and new energy is no easy feat. Others trying to remake themselves for a new era also will wrestle with finding the right person for the job.

Germany enlarges green transition’s grey area

2 Dec 2021

Berlin’s new coalition wants to build new plants powered by natural gas, even as it exits coal quicker. That strays from the ideal path to net-zero CO2 emissions. But the real problem is the precedent set by rich countries caving to those promoting gas as a green “bridge fuel”.

Capital Calls: Wise, Swedish oil

30 Nov 2021

Concise views on global finance: The 8 bln pound money-changer raised its revenue targets; $10 bln Swedish oil company Lundin Energy may be considering M&A options.

Glencore’s activist is misguided but not unhelpful

30 Nov 2021

Bluebell is pushing the $63 bln miner-trader to spin off coal. Thungela’s plans to dig up more of the mineral after its Anglo spinoff weaken the argument, and prices are at record highs. Still, if it makes Glencore quit coal quicker than its 2050 target, it’s a job well done.

Capital Calls: Remy Cointreau, African petrol

25 Nov 2021

Concise views on global finance: With profits soaring, the cognac maker will face mounting pressure for M&A; commodity trader Vitol buys out minority shareholders in London-listed fuel distributor Vivo.

Capital Calls: Eni spinoff

22 Nov 2021

Concise views on global finance: The $50 bln Italian oil group has a new name for the renewable energy and retail arm it plans to partially list.

Chancellor: Investors unprepared for carbon crunch

18 Nov 2021

Markets aren’t effectively factoring in a potential hydrocarbons scarcity. It’s not just that the world is trying to get off fossil fuels. They’re increasingly expensive to extract as supplies reach their peak. It’s another downside risk investors need to consider.

Viewsroom: European bank M&A, De-Dutching Shell

18 Nov 2021

Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.

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.