Oil & Gas

Dearth of oil bids is mostly about Brazil, not oil

7 Nov 2019

Landmark auctions for offshore deposits elicited virtually no international interest, with state-run Petrobras putting up most bids. Oil market ructions are making global majors think twice about big investments. But the main problem is Brasilia’s inability to stop meddling.

Viewsroom: When the CEO breaks the rules

7 Nov 2019

McDonald’s has provided a map for other firms after ousting boss Steve Easterbrook over a consensual relationship with an employee. Elsewhere, Aramco’s IPO and Fiat Chrysler’s merger with Peugeot. Plus: Breaking Japan’s love of hard cash.

Cox: Aramco is an ESG investor’s worst nightmare

7 Nov 2019

The Saudi oil giant’s business model is predicated on humans continuing to spew CO2 into the atmosphere. Its governance makes WeWork look benign. Its monarchy is overly tolerant of human rights abuses and beheadings. Fund managers with a conscience should boycott the deal.

Aramco’s intrepid investors are hedged in two ways

4 Nov 2019

Buying into the Saudi oil giant’s IPO means owning a tiny part of a state entity, with no control. Yet its pledge to pay a chunky $75 bln dividend for five years means punters are really preferred shareholders. A large retail offer could also limit Riyadh’s scope for rogue moves.

Aramco IPO can choose either price or credibility

4 Nov 2019

The Saudi Arabian oil giant’s long-delayed float is finally underway. It might seem success hinges on how close Riyadh gets to its desired $2 trillion valuation. A better benchmark is how much foreign investors buy in to the local listing. They’ll require a much lower price tag.

Viewsroom: LVMH wants more sparkle

31 Oct 2019

The $200 bln luxury conglomerate is making a $14.5 bln bid for Tiffany. The iconic brand known for putting its bling in blue boxes would be wise to accept the proposal. Plus: Venezuela’s leadership saga and a surreal debt drama collide. And: the world’s most expensive chocolate.

Elliott nabs easy win by playing pass the pump

31 Oct 2019

Paul Singer’s activist shop notched another easy win by coaxing $44 bln oil group Marathon to oust its CEO and spin off its Speedway gas stations. The latter bought Hess’s retail arm in 2014 – after Elliott pushed the firm to slim down. Double dipping makes winning a lot easier.

Shell’s high-wire balancing act is getting harder

31 Oct 2019

The Anglo-Dutch oil major beat third-quarter expectations but warned it may slow a $25 bln share buyback. Shell needs the economy and oil prices to hold up to control its debt, pay investors their world-beating dividend and replenish reserves. The latter may have to give too.

Venezuelan oil-debt fight takes Dadaist turn

29 Oct 2019

The U.S. helped Juan Guaido, the opposition leader it sees as president, by preventing creditors from seizing Citgo, the U.S. refiner that backs defaulted PDVSA bonds. But Guaido still filed a lawsuit to void the debt because the national assembly didn’t approve it. It’s a mess.

BP’s new CEO can give investors a golden hello

29 Oct 2019

The UK oil major had a messy third quarter as it took a charge on recent disposals, and borrowing jumped year-on-year. But it also pays out less of its cash than peers. If incoming boss Bernard Looney can limit future writedowns, he has a simple way to get investors onside.

Viewsroom: WeWork’s future may lie in China’s past

24 Oct 2019

Beijing-based Kr Space switched from renting out space held on long-term leases to selling services after the shared-office market crashed. Following suit may help WeWork stem losses. Also: climate change and Canada’s election. Plus: the gloomy IMF and unrest in Latin America.

Aramco’s latest IPO delay is a triple fail

18 Oct 2019

It’s embarrassing enough that the Saudi oil giant has again postponed its float. The hitch also messes up the kingdom’s efforts to show its best side at an upcoming annual finance junket. And it undermines Saudi’s already-shaky attempts to attract more foreign investment.

Aussie engineer tugs too strongly on the flag

17 Oct 2019

A $5 bln oil services company wants the foreign-investment watchdog to stop a Middle Eastern investor from raising its stake. It’s an odd defence. Rules that let suitors creep up on their targets may have pushed WorleyParsons into a corner, but it sets an uncomfortable precedent.

Pemex debt riddle stumps Mexican president

15 Oct 2019

The IMF has panned the isolationist approach AMLO, as he's known, is taking. His budget relies on the state oil giant producing cash, but Pemex needs all the pesos and dollars it can get to boost production and reduce $102 bln of debt. Without private investment, it can't add up.

Total’s Indian deal offers only a soft premium

15 Oct 2019

The French energy giant’s bid for part-control of Adani Gas is worth a measly 9% over the pre-deal price. That won’t entice public investors, allowing Total to buy a 37% stake from the namesake family. At least having a foreign partner may provide a governance uplift in value.

Nigeria’s $62 bln oil demand is bargaining chip

10 Oct 2019

That’s how much Africa’s top crude producer wants big oil companies like Shell and Exxon Mobil to cough up under a review of 1990s contracts. In theory Abuja could seize output. In reality it’s sending a message ahead of talks over deep-water production licences due for renewal.

Ecuador violence tests new IMF chief’s resolve

9 Oct 2019

Days before Kristalina Georgieva presides over her first annual meeting, President Lenin Moreno fled the capital as IMF-backed austerity measures sparked riots. Balancing support for the tough choices he’s making, while improving the IMF’s standing in the region, will be tricky.

Angola’s answer to Aramco has similarly tricky IPO

9 Oct 2019

Like Saudi Arabia, the secretive African nation wants to float its state oil firm. With a possible $50 billion valuation, Sonangol is no minnow but years of delays suggest a 2022 listing deadline could slip. As with Riyadh, the long-term threat to oil gives good reason to hurry.

BP’s new boss has a tougher gig than forerunner

4 Oct 2019

Bernard Looney will replace Bob Dudley as the oil major’s chief executive. While the latter restored BP’s image and balance sheet after the Gulf of Mexico spill, the exploration veteran will manage the transition to a low-carbon world under a very bright spotlight.

Ecuador exit an irksome speck in OPEC’s eye

2 Oct 2019

Saudi Arabia may shrug off the latest departure from the oil-producing group over which it presides. Ecuador has other priorities that make it expedient to detach. But the net effect is bad for OPEC, because it’s a reminder that the value of membership is dwindling.