Oil & Gas

Goldman’s cosy Japan deal is ripe for rival bid

15 Nov 2021

The Wall Street bank and refiner Eneos are forging ahead with a contested plan to take full control of $4 bln roadbuilder Nippo. Even with a richer premium, a leveraged buyout would deliver a healthy return, Breakingviews calculates. It’s a fresh test of Japan Inc’s dozy ways.

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.

Exxon is the stock investors will hate to love

29 Oct 2021

Like its peer Chevron, the U.S. oil giant has been blunt about its commitment to fossil fuels. A 60% jump in sales last quarter shows that paid off. With fewer drillers to feed returning demand, and crude above $80 a barrel, the companies are well placed for a mini-comeback.

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.

Dan Loeb is oversimplifying Shell’s long game

27 Oct 2021

The activist wants the $190 bln Dutch oil giant to break up. That makes sense in theory from a valuation and capital allocation standpoint. But separating out fossil-fuel cash flows from greener energy risks starving Shell's planned transition of the funding it needs.

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.

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.

Green transition needs a wider focus than oil cuts

13 Oct 2021

Fossil fuel investment has fallen to levels that would limit global warming to 1.5 degrees Celsius, the IEA says. Yet measures to hike green energy and curb demand are just as important, and lagging. Unless states act, high energy prices risk becoming an ongoing headache.

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.

Chevron tiptoes around the climate bonfire

11 Oct 2021

The U.S. oil giant hopes to cut operational greenhouse emissions to net zero by 2050. Its plan lags that of peer Occidental and European rivals. Boss Michael Wirth may be trying to stay realistic, but timidity isn’t a virtue when others are being much more ambitious.

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.

Capital Calls: Pandora, Facebook files pack punch

4 Oct 2021

Concise views on global finance: A leak with rich people’s offshore activities and a Facebook exposé reinforce perceptions with facts; GitLab’s float shows Microsoft’s wise 2018 buy; Volvo IPO aims to supercharge EV plans; BT’s bid to rule UK broadband may face U.S. competition.

Capital Calls: Reliance Industries, Mediobanca

29 Sep 2021

Concise views on global finance: The Indian giant is trying to stave off an investor rebellion against its board appointment; top shareholder Leonardo Del Vecchio is proposing a governance shakeup at the Italian bank.

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%.

The smarter way to avoid energy crises: use less

24 Sep 2021

Soaring power prices have prompted calls to build more wind turbines, hike gas storage, or revive nuclear energy. But a big push to make buildings, industry and transport more efficient could help halve global demand by 2050. It’s something governments can act on straight away.

Capital Calls: Airline partnerships, Labor market

21 Sep 2021

Concise views on global finance: An alliance between American and JetBlue could fall foul of the U.S government, even though Washington could benefit from it; U.S. Bancorp’s promised savings in its deal to buy MUFG Union may be easier than usual to achieve without firing people.

UK power market deficiencies flash red at bad time

20 Sep 2021

Britain may spend hundreds of millions of pounds propping up its energy sector. Soaring prices are a global problem, but the UK has a more liberal market and fewer alternative power sources. It’s a poor look as Boris Johnson prepares to lecture others on cutting carbon emissions.

Guest view: Hold auditors to account on climate

20 Sep 2021

The risks of global warming are missing from companies’ financial statements. Accounting firms must share the blame alongside directors, writes Natasha Landell-Mills of Sarasin & Partners. Investors have the power to demand better, while governments can help speed the shift.

Spain’s utility goof is thin end of net-zero wedge

17 Sep 2021

Madrid’s $3 bln raid on the coffers of its power sector is a clear climate-change own-goal. The political sensitivity of energy prices means it won’t be Europe’s last. The bigger risk is Brussels watering down the carbon-trading scheme partly responsible for gas prices soaring.

Norway readies fresh round of green air guitar

14 Sep 2021

The Scandinavian state is on track for a left-wing coalition pledging to do more on climate change after eight years of conservative rule. But rapid cuts to national hydrocarbons output aren’t likely. Given Norway has a $1.4 trln wealth fund, it can afford to go beyond gesturing.