Oil & Gas

Corona Capital: Uber, Tokyo Olympics

20 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Uber’s contact-tracing program could help stem Covid-19’s spread and mend relationships with municipalities; and Japan PM Shinzo Abe faces discontent over his handling of both the virus and the postponed Olympics.

OPEC maintains illusion of control over oil price

15 Jul 2020

The producer group and allies stuck to plans to hike output, after coordinating a huge cut in April. While that will soothe jittery oil traders, a second virus wave would ruin the calm. And the more prices rise, the harder it will be to stop members pumping what they like.

Warren Buffett makes natural gas his new Dominion

6 Jul 2020

The Sage of Omaha’s energy unit is paying $4 bln plus debt for most of the U.S. utility firm’s pipelines for the fossil fuel. Natural gas prices have slumped thanks to virus-induced lockdowns. But the fuel’s future is more stable than oil’s, and Buffett has drilled a good price.

Corona Capital: Tesla, OPEC

2 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Tesla speeds past its traditional rivals, and OPEC’s next meeting shapes up to be a bruising encounter.

Oil majors’ Atlantic divide shows up in valuation

2 Jul 2020

U.S. and European producers’ divergence in climate change action is becoming increasingly obvious. Yet investors value Exxon Mobil and Chevron higher than Royal Dutch Shell and BP. At least for now, investors seem reluctant to view energy transition awareness as a good thing.

Tesla market milestone puts Musk pay in overdrive

1 Jul 2020

The Silicon Valley upstart has overtaken Toyota to become the world’s largest carmaker by market worth. Its rapid ride to a $210 bln value also starts the clock on another huge payout for CEO Elon Musk. But production and income show investors have gotten ahead of themselves.

Corona Capital: Drug hoarding, Vacation-free world

1 Jul 2020

Concise views on the pandemic’s corporate and financial fallout: Stockpiling of Covid-19 treatment remdesivir may come back to haunt the Trump administration, while a forecast of $3.3 trillion in lost tourism is more than an inconvenience for some national economies.

Corona Capital: U.S. recovery, Small-business aid

30 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: White House virus adviser Anthony Fauci’s estimate that U.S. cases could breach 100,000 a day is bad news for the economy. Plus: Uncle Sam’s loan program for small businesses comes to an end with money in the bank.

Bankrupt shale pioneer’s backers need new model

29 Jun 2020

Chesapeake enters Chapter 11 with funding to come out again. Supportive creditors may be right that there’s a future in U.S. fracking, which the firm helped develop. But making money was hard when borrowing and dealmaking were easy. It’ll be even tougher as climate risk bites.

BP’s $5 bln chemicals sale is easy bridge to burn

29 Jun 2020

The UK oil major is offloading its remaining petrochemicals assets to privately held Ineos. Selling out of a growth area for an unspectacular price would usually seem like a strategic goof. But BP was a small player, and CEO Bernard Looney needs cash for his zero-carbon pivot.

Corona Capital: Payments systems, Shale

22 Jun 2020

Concise views on the pandemic’s corporate and financial fallout: Payments systems get some good news, shale oil drilling’s double whammy.

BP’s funky debt charts end of credit’s lockdown

18 Jun 2020

The oil major issued $12 bln of bonds that count as equity, its first such deal. Investors’ hunger for esoteric securities from a tricky sector illustrates their enduring need for yield, thanks to central bank largesse. A weak economy and risk-hungry markets are a dangerous mix.

Aramco’s SABIC saga ends in unhappy compromise

17 Jun 2020

The $69 bln that the oil giant has ended up paying for a 70% stake in the chemicals firm is a lot more than its current value. Aramco’s consolation is that it can pay SABIC’s owner, a Saudi wealth fund, over a longer period. But neither buyer nor seller is getting what they want.

BP’s greener credentials sharpen focus on dividend

15 Jun 2020

The energy giant is writing off up to $17.5 bln after slashing long-term oil price forecasts. BP’s green transition would get an extra boost if it cut dividends to spend more on low-carbon output. But as Royal Dutch Shell has found, that irks investors it needs to keep sweet.

Oil prices are stuck in a narrow tunnel

12 Jun 2020

After spiking above $40 a barrel, crude has now slumped again. Voluntary and enforced supply cuts have put a floor under the market after April’s shock falls. But the risk of a second coronavirus wave, and the difficulties of coordinating production hikes, point to a ceiling.

Tycoon’s rig empire leaves lenders deep underwater

3 Jun 2020

Oslo-listed Seadrill, founded by billionaire John Fredriksen, wants to swap its $7.4 bln of debt for equity. A slump in crude prices means creditors will face heavy losses. But, with oil majors retrenching and rigs heading for the scrapyard, a bankruptcy could be even messier.

Exxon climate activists can call in reinforcements

28 May 2020

Environment-linked resolutions won less backing at the $193 bln energy firm’s annual meeting on Wednesday than at rivals’. Replacing directors is the next logical step. It’s a task traditional activists are more used to – and Exxon’s poor financial record could pull them in.

Morgan Stanley gets closer to real Reliance prize

22 May 2020

Deals are flowing fast as Mukesh Ambani rejigs his empire. The U.S. bank has helped raise $10 bln for the tech unit from Facebook, KKR and others. It wasn’t on a bigger deal inked with Aramco but that’s less important, especially with the $70 bln Jio unit’s IPO on the horizon.

Energy’s titans will experience a dead cat bounce

21 May 2020

The virus-led crude price crash is upending petrostates and oil majors alike. Incumbent leaders with storage capacity and low costs might seem to be the winners as smaller competitors flounder. But they’ll fall victim to the longer-term behavioural shifts prompted by Covid-19.

Moscow finds oil and vodka make a poor cocktail

21 May 2020

The former owners of Yukos, the energy group founded by Vladimir Putin foe Mikhail Khodorkovsky, are going after the Kremlin by grabbing trademarks for brands like Stolichnaya. These won’t make up for their lost $57 bln but may give aggrieved investors some negotiating leverage.