Oil & Gas

Middle East reignites Santos’ M&A pipe dreams

4 Jul 2024

Shares of the $17 bln Aussie driller jumped on a Bloomberg report that Aramco and ADNOC are each studying bids. That may yet lure in BP, Chevron and others. But the return on investment remains as ho-hum as when Santos CEO Kevin Gallagher opened the door to a deal last year.

Moscow’s war yields a new type of Russian oligarch

5 Jun 2024

Vladimir Putin has long tamed his country’s 1990s-era billionaires, and a later cadre of ex-KGB moguls. Now the Russian president has picked a third generation of businessmen to own and manage confiscated Western assets. They won’t be any less subservient to his whims.

Aramco’s $12 bln share sale is borne of necessity

31 May 2024

Saudi Arabia is selling an extra 0.6% slice of the $1.9 trln oil giant. Riyadh needs cash because budget concerns have delayed projects to diversify its economy. The company’s low valuation versus global rivals makes the timing suboptimal. At least buyers get an attractive yield.

Exxon’s Darren Woods gets a Biden-era dividend

30 May 2024

The oil giant’s CEO just closed a merger with Pioneer, and slapped down a slew of ESG-related shareholder proposals. Exxon’s market value of $510 bln now nearly matches Tesla’s. All this under – and in some cases thanks to – a US president who vowed to fight climate change.

Conoco’s Marathon deal is cheap and cheerful

29 May 2024

As rivals like Chevron buy premium assets at high prices, the $139 bln Conoco is bagging OK assets at a reasonable $23 bln. The return on investment of 10% is attractive, though. And it leaves the oil sector positioned for future consolidation – maybe with Conoco as a target.

Chevron has chance to save doubtful Hess deal

17 May 2024

If Hess shareholders are sensible they will vote down Chevron’s uncompelling $51 bln offer. The premium is small and closure is uncertain. Besides, Hess’s offshore crown jewel in Guyana may be gaining in value. Chevron has a brief opportunity to up its game.

Wood Group is parable for takeover-wary UK boards

16 May 2024

Shares in the energy-services group have languished since Apollo ditched a $2 bln proposed bid last year. The board is struggling to get a new suitor to match the old price. With UK firms facing record takeover interest, it’s a reminder that cash premiums are often hard to beat.

Oil groups’ AGM rebels may lose even if they win

13 May 2024

Shell’s annual shareholder meeting will be a showdown between CEO Wael Sawan’s climate strategy and an activist group’s emission reduction proposal. Investors are unlikely to turn against the UK oil major. But the results may be disappointing even if they do force change.

Total’s US re-listing idea could backfire

8 May 2024

The $170 bln oil major is considering decamping to the United States to court oil-friendly investors. Yet getting included in the big stock index would mean cutting French roots, and a valuation boost looks unlikely. Staying at home may also be better for its growing power unit.

Trustbusters target poor man’s John D. Rockefeller

2 May 2024

Today’s energy producers wield far less clout than the industrialist’s Standard Oil, whose breakup shaped US competition law. By comparison, the FTC’s collusion case against Pioneer’s ex-CEO linked to the $65 bln Exxon deal is mostly symbolic. Robber barons lurk elsewhere now.

Exxon and gas markets tell different stories

26 Apr 2024

CEO Darren Woods denies fossil fuels are in decline, thanks to growing populations and rising petrochemicals demand. Yet a glut of natural gas – which reined in quarterly profit at Exxon and rival Chevron – is a real problem, and one that could weigh on prices for a long time.

Spain’s utility saga calls for tough balancing act

18 Apr 2024

The UAE wants to buy 40% of 22 bln euro Naturgy from its private equity owners. That would usually require a full takeover, but Madrid has form on protecting key infrastructure. Spain will have to balance its desire to retain control with the need not to scare its bidder away.

Oil traders make risky bet on calm in Middle East

15 Apr 2024

Crude prices fell after Iran attacked Israel, probably because the Islamic Republic telegraphed its strikes in advance. Still, the unprecedented move may elicit an Israeli response. With oil supplies tightening, regional tensions and prices could yet reset at a higher level.

BP takeover is both appealing and daunting

12 Apr 2024

Abu Dhabi National Oil Company recently considered buying its $110 bln British peer. It’s unlikely to be the only suitor. BP trades at a discount to other oil giants and recently installed a new CEO. But UK security concerns and EU antitrust rules present formidable hurdles.

UAE flips own script with $4 bln oil pipeline deal

5 Apr 2024

Abu Dhabi’s $100 bln fund, Lunate, bought KKR and BlackRock’s 40% stake in ADNOC’s infrastructure arm. In recent years the UAE has raised cash from foreign investors by selling minority stakes in its oil giant. The latest deal does the opposite.

An $8 bln merger wrings out oilfields’ last drops

2 Apr 2024

The oil industry has refocused on returning cash in lieu of expansion, leaving a meaner market for companies that help to drill wells. SLB’s purchase of ChampionX is a smart way to hold ground, especially since only half of promised benefits need materialize to square the math.

Eni’s green shoots are taking time to blossom

28 Mar 2024

Italy’s $53 bln energy major trades at a discount to rivals. An overhang from Rome’s potential stake sale and falling gas prices are drags. But CEO Claudio Descalzi’s plan to raise cash by spinning off energy transition-focused business units is also yet to fully shape up.

LNG angst seeps from consumers to producers

27 Mar 2024

A few years ago, supplies of liquefied natural gas were scarce and prices sky-high. Extra capacity arriving this decade means there could soon be a price-sapping glut. Big suppliers like Qatar and Shell have long-term contracts that can ease the pain, but only up to a point.

Capital Calls: Shell and Russia

26 Mar 2024

Concise views on global finance: Russian state giant Gazprom will buy the British energy major’s 27.5% stake in a major Siberian liquefied gas field for the equivalent of $1 bln. Shell is however unlikely to be able to get hold of the cash any time soon.

Energy firms can’t all be better than average

22 Mar 2024

The industry’s big event in Houston saw oil, gas and renewable firms believe in different realities, mixed with resentment of being overlooked and supposed government favoritism. But in a commodity industry, low cost eventually wins, and that is renewable fuel.