Oil & Gas

Risk of war implies lasting Russia discount

22 Feb 2022

Groups like Sberbank plunged after President Vladimir Putin sent tanks into two Ukrainian regions, although lame European sanctions helped them recover. Even if the Kremlin leader halts his military advance, the threat of tougher penalties will linger over Russian assets.

Capital Calls: Theme park M&A, Energy IPO

16 Feb 2022

Concise views on global finance: Cedar Fair rebuffed a takeover offer from rival amusement park operator SeaWorld, but other buyers may be reluctant to join the ride; The $8 bln Vaar Energi, majority owned by Italy’s Eni, sees its shares dip on their first day of trading.

High power prices are no reason to ditch net zero

14 Feb 2022

Some politicians blame soaring energy costs on the global drive to cut carbon emissions. Yet climate change policies don’t explain the price spike, while investment in oil and gas is high enough. The criticism risks undermining tougher challenges like reducing demand for power.

Naturgy split may be less than sum of its parts

11 Feb 2022

The 25 bln euro Spanish power group is putting renewable energy and gas under one roof and fencing off its regulated network business. It could create value if investors see gas as less worthy of a discount than they have in the past. But that’s a pretty big if.

BP inserts wind in sails of its energy transition

8 Feb 2022

The $110 bln UK group joined oil peers in reporting bumper results. But it also pledged to maintain fossil fuel profitability despite cutting output, and gave new 2030 targets for its low-carbon growth business. That could start to revive its becalmed valuation.

Big Oil elbows out banks as Fed’s new kingmaker

3 Feb 2022

The energy sector has come out swinging against Sarah Bloom Raskin, President Biden’s pick to lead supervision at the U.S. central bank. The ex-Fed governor is outspoken on climate risks. The business lobby could frustrate her confirmation, even with Democrats in Senate control.

Shell oddly well placed to resist oil’s siren call

3 Feb 2022

The $200 bln UK driller is keeping a lid on new investment, despite $90-a-barrel oil prices. A court order to cut emissions and investors’ desire for cash explain why. But Shell’s recent exit from shorter-life U.S. shale makes a sensible ramp-up of new output harder anyway.

OPEC gets closer to a Wizard of Oz moment

2 Feb 2022

When the curtain fell back, the fairytale character’s powers proved bogus. The cartel’s ability to steer crude prices rests on the market believing it can boost production. Challenged members like Angola make that tricky, raising the risk oil prices soar higher still.

Big Oil faces cash tug-of-war

1 Feb 2022

Both Exxon and Chevron slashed expenditures last year as economic slowdowns stalled oil demand. Both companies’ earnings show the cash spigot is on. With oil around $90, reformed spending sinners will get the urge to splurge. Shareholders might prefer cash goes back to them.

Italy energy firm dive is Rome’s latest hot potato

1 Feb 2022

Oil services firm Saipem may need at least 1 bln euros of fresh equity after warning of a loss just three months into a new business plan. The shock puts pressure on new CEO Francesco Caio. Given the uncertainty, top investors Eni and the Italian state may foot most of the bill.

Oil dims hope central bankers will walk fine line

28 Jan 2022

Brent crude topped $91 a barrel for the first time since 2014. Rate-setters can usually ignore temporary jumps, but not when inflation is already high. Fed boss Jay Powell and global peers will struggle to hike rates enough to curb price pressures without stifling growth.

Europe’s gas crunch can avoid worst-case outcome

28 Jan 2022

For a continent struggling with high energy costs, a Russian invasion of Ukraine would be a nightmare. But cutting off gas exports would also damage President Vladimir Putin. Barring a total boycott, liquefied gas imports and action by corporate buyers could limit the disruption.

The Exchange: Hydrogen wave

27 Jan 2022

Can green hydrogen decarbonise big chunks of our economies? Air Products CEO Seifi Ghasemi, who’s backing the carbon-free gas in a major Saudi Arabia project, thinks so. He tells Lisa Jucca how his $61 bln group plans to be the world’s top green hydrogen producer in five years.

Italian CEOs’ Putin call exposes European discord

26 Jan 2022

Rome is pushing the firms to scrap their virtual chat with the Russian leader. With their varying degrees of investment, trade and energy dependence, Europeans have more to lose from sanctions against Moscow than the United States. That lets Putin pit them all against each other.

Eni’s quirky rejig may turn rivals green with envy

24 Jan 2022

Italy’s $54 bln oil major may list stakes in its green energy and biofuels arms, as well as a Norwegian subsidiary. That’s different from rivals which are financing green investments by selling fossil fuels. Yet if Eni’s spinoffs get cheaper financing, others may follow suit.

Larry Fink’s pragmatism is awkward but lucrative

18 Jan 2022

The BlackRock CEO rejected criticisms that stakeholder capitalism is “woke”, while backing natural gas. The danger for Fink is that he occupies a no man’s land position on culture war hot topics. His consolation is that $10 trln of assets suggest investors are down with that.

Power windfall tax is bad idea whose time has come

17 Jan 2022

European leaders are under pressure to help households with soaring power bills. Taxing energy companies is potentially ineffective and replete with unwise incentives. The idea could nevertheless catch on, and oil giants like BP and Shell may need to take the strain.

EU greenwash laxity could see it build back worse

13 Jan 2022

Europe’s green taxonomy is meant to direct billions of euros towards clean energy so a post-virus continent can “build back better”. Yet political fudges mean gas and nuclear count as sustainable. Worse, the tool’s new draft contains loopholes that could make it dirtier still.

Kazakh oligarch shakeup may give foreigners a shot

12 Jan 2022

President Tokayev needs to consolidate power after unrest and raise cash to placate his citizens. Billionaires allied to his predecessor are obvious targets. Since he lacks a go-to gang to take over mining assets, he may favour gradual redistribution and more external investment.

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.