Oil & Gas

Exxon activists attempt to hit CEO where it hurts

13 May 2020

Some U.S. investors prefer the top executive and chair to be different people; most don’t care. Exxon will test the theory this month. Even if the arguments are theoretical, stripping the boss of a status-boosting title sends a message. That's why Darren Woods should worry.

Aramco well placed for timid oil recovery

12 May 2020

The Saudi oil giant’s earnings slumped 25% in the first quarter, but its cash pile means it can keep dividends flowing. True, Aramco may not prevail in its Atlas-like attempt to prop up the world’s oil market alone. But there are tentative indications that it might not have to.

Climate activists get bigger bang from smaller ask

11 May 2020

U.S. fossil-fuel firms have been more resistant to shareholders’ demands on global warming than European rivals. But a majority of Phillips 66 owners just backed a climate vote that Exxon and Chevron will soon face. The activists’ success may be down to their more targeted scope.

Saudi’s $69 bln asset rejig collides with reality

11 May 2020

Giant Aramco is trying to cut the price of last year’s deal to buy 70% of chemicals firm SABIC. A discount would give Riyadh’s Public Investment Fund less cash to pivot Saudi’s economy away from oil. Budget concerns make helping the kingdom’s corporate cash cow more important.

Oil car crash highlights Aramco investors’ airbag

6 May 2020

The Saudi crude giant’s shares have fallen less than those of western peers. Shareholders’ scope to avoid the dividend cuts now hitting oil majors is one reason why. It helps that Riyadh may be able to borrow its way out of the crisis rather than have to drain its cash cow.

Mukesh Ambani gives Saudis a run for their money

4 May 2020

A $7 bln rights issue backstopped by the Reliance Industries boss will help keep his promise to cut debt. Although smaller than a delayed deal with Aramco, the discounted stock sale is a record for India. The symbolic significance should instil more confidence amid the pandemic.

U.S. oil giants play chicken with shareholders

1 May 2020

Shell cut its dividend on Thursday and took a realistic outlook towards the fossil fuel’s future. But U.S. drillers are forging ahead as if the commodity’s only challenge is price. Without a thoughtful 30-year plan, Exxon and Chevron can only hope to tread water, at best.

Chevron is M&A-ready. Exxon, not so much.

30 Apr 2020

The oil-price rout has left small and mid-tier U.S. drillers in pain and ripe for takeovers. Major players are hurting too, but Chevron, though not as big as Exxon, has been more prudent with cash and debt, and its stock has held up better. Occidental may even be in its sights.

Shell’s dividend surrender is a necessary evil

30 Apr 2020

Given it hadn’t reduced shareholder payouts since WW2, the Anglo-Dutch major’s two-thirds cut hurts its pride. But amid an epic price crash boss Ben van Beurden couldn’t have kept Shell’s rating and paid to transition from oil. Stubbornly clinging on would have been even worse.

Wall Street awaits Chinese oil crash post-mortem

29 Apr 2020

The country’s fourth-largest lender fumbled a crude product, leading to $1.4 bln in losses. Regulators have pushed wealth management assets onto commercial bank balance sheets, with uneven results. Foreigners mulling market entry should watch how watchdogs tackle the mess.

U.S. oil bailout should pay to still the drill

28 Apr 2020

The White House is mulling how to keep the fossil-fuel industry afloat. Emergency loans or equity stakes have many drawbacks. Compensating companies for keeping black gold in the ground has risks, too. But it would give Uncle Sam a semblance of control over demand and price.

Italy gives glimpse into post-pandemic dealmaking

28 Apr 2020

Politicians in Rome want to wed gas-grid operator Snam with power network Terna. Creating a 25 bln euro group would offer few cost savings and blur their industrial missions. It’s a sign that governments will want bigger, less-risky, more-diversified “champions” in the future.

BP’s dividend sangfroid may not last long

28 Apr 2020

The oil giant held its payout steady in the first quarter, despite crude prices falling off a cliff. CEO Bernard Looney has enough cash to keep it up this year. But debt has spiked and oil is now even cheaper. At the very least BP should let investors take dividends in shares.

Cox: Windfall-tax Covid-19’s sweepstakes winners

27 Apr 2020

Leaders are justifying bailouts saying the pandemic is “nobody’s fault”. By that logic giants like Amazon gaining ground as small firms collapse were handed unequal advantages by states. Tariffs such as those imposed on oil drillers after OPEC’s embargo could level the field.

Oil market inferno claims victims of all sizes

24 Apr 2020

This week’s price crash in U.S. crude looks an age-old example of small retail investors getting burned while savvy institutional players supply the matches. That does seem to have been part of the story. But some professional money managers probably also got singed.

Corona Capital: Primed debt, Lysol

24 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: Senior creditors get “primed”; Reckitt Benckiser warns customers not to inject Lysol.

Russia’s oil-and-virus airbag is robust but finite

24 Apr 2020

The double whammy of a crude price collapse and Covid-19 could cause a hefty budget deficit. Moscow’s $170 bln wealth fund can plug a hole worth 5% of GDP if need be. The issue is more the optics of raiding the piggy bank while looking relatively stingy on subsidising wages.

Viewsroom: The F’d up oil market

23 Apr 2020

Breakingviews columnists in London, Mumbai and Brooklyn discuss what’s going on in the global energy markets amid the coronavirus crisis, as well as Facebook’s big Indian deal and the U.S. government’s attempt to prop up small businesses with the Paycheck Protection Program.

Corona Capital: Merger bans, Moelis, Domino’s Pizza

23 Apr 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. politicians plan a curb on opportunistic M&A, advisory boutique Moelis cuts its dividend, and Domino's delivers.

Norway shines awkward light on Big Oil dividends

23 Apr 2020

Oslo’s state-owned $42 bln Equinor is slashing its first-quarter payout by 67% after oil prices turned negative this week. Bigger peers like Royal Dutch Shell really won’t want to follow suit and have some leeway not to. But a live example of caution makes it harder to hold firm.