Oil & Gas

Shell’s legal win flags need for new green metrics

12 Nov 2024

A Dutch court has nixed a 2021 ruling forcing the $204 bln oil major to cut emissions by 45% by 2030. Such metrics had already been undermined by Big Oil asset sales, which don’t stop climate change. Drillers’ spending on low-carbon energy is a better gauge of green credentials.

Wood Group saga is a masterclass in M&A self-harm

8 Nov 2024

Shares in the energy-services group were already miles below where suitors Apollo and Sidara had offered to buy. Now they’ve halved after Wood Group garbled a message about future losses. The likely upshot is shareholders accept a third offer – even lower than the first two.

Saudi megafund’s success rests on fuzzy local bets

5 Nov 2024

The kingdom’s $950 bln Public Investment Fund is best known for outlandish construction schemes and flashy foreign forays. But its biggest and fastest-growing division houses young domestic firms. While some may thrive, it’s less clear they can guarantee the vital pivot from oil.

Oil glut renders industry’s appeal purely relative

1 Nov 2024

A record 5 mln bpd of spare OPEC+ capacity helps explain lower profit at Exxon, Chevron and Conoco. The titan run by Darren Woods has positioned itself better to handle the surfeit. Nevertheless, the next decade of returns from US crude producers will be even worse than the last.

Saudi’s Davos is no longer such a desert

1 Nov 2024

Around 8,000 CEOs and financiers flocked to the Future Investment Initiative in Riyadh, twice the number at its inception in 2017. Western bosses were keener to talk about artificial intelligence than investing in the kingdom. But Saudi’s progress suggests that may yet change.

BP may have to become even less investor friendly

29 Oct 2024

The $83 bln UK major is facing a strained balance sheet, low oil prices and trouble in its renewables unit. CEO Murray Auchincloss’s plan to return cash will hinge on tricky asset sales. Cutting buybacks would be better but would make the stock even less appealing than its peers.

Many roadblocks delay journey to zero carbon world

28 Oct 2024

While solar power and battery supply have grown massively, the same is not true of electricity grids, green hydrogen and carbon removal. Money is more expensive. This means demand for oil, gas and coal has not yet peaked. The setback will cost the planet dearly.

Equinor’s Orsted bet is cheap route to green goals

7 Oct 2024

The Norwegian driller has bought about 10% of the $26 bln Danish green energy group. Oil groups are more bullish about crude, but still have renewable energy capacity targets. Orsted’s recent strife offers a cheaper way for Equinor to get there than building the kit itself.

Middle East turmoil edges closer to global economy

3 Oct 2024

Military escalation between Iran and Israel may at some point affect the price of oil. In this Viewsroom podcast, Breakingviews columnists debate how the conflict may prompt a fresh inflationary headache for central banks – and how Saudi Arabia might offset that risk.

Gulf turmoil will leave ratesetters on edge

2 Oct 2024

Israel’s riposte to Iran’s missile strike may see oil prices spike. The Fed, the ECB and peers struggled to contain inflation in 2022. A new energy crisis, along with a US docker strike, would force central banks to rethink rate cuts just as markets price them in.

ADNOC German deal is blueprint for Gulf takeovers

1 Oct 2024

The UAE energy giant agreed to buy chemicals group Covestro for $16 bln including debt. It’s paying a big premium, retaining management and injecting extra capital. The terms are a sign of the hoops Middle Eastern buyers must jump through to get hold of sensitive European assets.

Saudi oil may keep a lid on Middle East fallout

30 Sep 2024

Israel’s killing of Hezbollah’s leader invites a response from its backer Iran, which could cause crude prices to spike. Yet Riyadh may also soon start pumping a lot more oil. That could prolong the extent to which the economic impact of seismic Middle East events stays regional.

Oil’s new slump cuts across OPEC’s plan A

4 Sep 2024

Crude prices are off sharply, partly due to weak economic data and partly because a potential Libyan supply crisis appears to have been resolved. Yet OPEC plans to hike output in October. The producer group may have to choose between aggravating the selloff and its own unity.

Saudi fund’s prudence pivot is only half complete

20 Aug 2024

The $925 bln Public Investment Fund is spending more money locally. That should do more to help Saudi’s diversification push than past international forays. But the domestic projects are often speculative, implying low returns and a continued shortage of foreign co-investors.

Iran danger marks return of oil’s risk premium

13 Aug 2024

Conflict in Gaza and tit-for-tat attacks in the Middle East have desensitised markets to possible supply shocks. A US warning of imminent retaliation against Israel changes that. Despite weaker demand, oil prices reflect the dangers of infrastructure and tankers becoming targets.

Woodside’s deal poses a new green conundrum

13 Aug 2024

Months after shareholders rejected its climate transition plan, the oil driller is buying an ammonia facility in Texas for $2.4 bln to help hit its emissions reduction goals. But the tech and end-uses are questionable. The return gives investors little to cheer, too.

Exxon’s dominance may not be good for Exxon

2 Aug 2024

The oil giant’s quarterly results show why its shares have outperformed Chevron's. Its $60 bln acquisition of Pioneer is reaping more savings, while production in the giant Permian and Guyana fields hit records. Exxon’s power is growing, but it could use friends here and abroad.

Shell-BP fantasy M&A has some grounding in reality

1 Aug 2024

Merging the two big UK oil groups is an idea that’s decades old. Shell boss Wael Sawan has minimal need or inclination to take the plunge. But $97 bln BP’s cheap valuation and potential synergies mean his hand might be forced if a rival lobbed in a bid, or if oil prices slumped.

Oil is an imperfect gauge of Middle East risk

31 Jul 2024

Brent crude prices rose 2.5% after senior Hezbollah and Hamas leaders died in strikes blamed on Israel. Oil traders have grounds to see the danger of a wider war as limited, but automated trading may increasingly act to muffle any concerns. It’s hard to tell which is right.

KKR-Eni biofuels deal is rich bet on governments

23 Jul 2024

The US investor could pay up to $14 bln for 25% of the Italian group’s bioenergy arm. That’s a big premium to listed peers, at a time when greener fuels made from crops are less favoured. Long-term growth rates mean it makes sense, but only if states keep assisting the market.