Oil & Gas

ConocoPhillips dividend squeeze tests 2012 split

29 Jan 2015

The $77 bln oil driller is more exposed than larger rivals to lower crude prices after ditching its refinery arm three years ago. That translates into a Q4 loss of $39 mln and big cuts in planned 2015 spending. Dividends will stay high for now, but growth may suffer as a result.

Shell refuses to hit panic button

29 Jan 2015

The Anglo-Dutch major, which met its 2014 targets, doesn’t want to overreact to the oil price rout. It has cut three-year capex plans by a modest 14 percent and is maintaining the dividend. Shell has a strong balance sheet, but even it will need a sharper axe if oil stays low.

Petrobras will test even Brazil’s believers

28 Jan 2015

Long-delayed results by the $50 bln state oil giant failed to include an audit or scandal-related writedowns. The festering problem casts a cloud over national reforms by Finance Minister Joaquim Levy, who impressed the Davos crowd. Petrobras bonds, however, may be worth a look.

Monetary mess threatens gains from oil oversupply

27 Jan 2015

Too much production accounts for about half of the oil price slide, by one calculation. The surplus of cheap crude should boost oil-importers’ GDP. But the gains may not materialise, thanks to central banks’ ultra-low interest rates and wobbling anti-deflation credentials.

An $18 bln deal straightens out twisted pipelines

26 Jan 2015

The convoluted structure at Energy Transfer Equity isn’t doing it any favors. Combining two master limited partnerships it controls may generate some savings. More importantly, it makes the company slightly easier for increasingly skeptical oil and gas investors to understand.

Siemens faces big oil deal debacle

23 Jan 2015

The collapsing oil price turns the German engineer’s dash for shale into a costly blunder. Its $7.6 bln September bid for U.S. oilfield kit maker Dresser-Rand will stain CEO Joe Kaeser’s reputation. With shares of Dresser’s peers clobbered, a major impairment is looming.

Saudi succession could cast shadow over oil policy

23 Jan 2015

A clearly identified heir means the death of the Kingdom’s reformist ruler is unlikely to destabilise the world’s largest crude producer. Yet the new king may boost spending to smooth the transition. The change may weaken Saudi Arabia’s tolerance for cheaper oil.

Oil billionaire pumps Kinder Morgan for tidy gain

22 Jan 2015

Continental boss Harold Hamm sold Hiland Partners, his private pipeline firm, to its giant rival for $3 bln. That ends a conflict arising from his initial stake in Hiland and covers his $1 bln divorce. Kinder, meanwhile, gets a prized – if pricey – foothold in the Bakken shale.

Economic reality could upend Fed message, too

21 Jan 2015

Following last week’s Swiss upset, Canada’s central bank set investors spinning again. The oil price-inspired rate cut from Ottawa seems out of step with stable inflation. But it shows how changing conditions could yet make the Fed’s careful expectations management look futile.

Big Oil’s dividends look safe – for now

20 Jan 2015

Leverage is low and costs and capex can be cut, so the likes of Shell and Total don’t need to slash payouts now. But the current oil price drop has a 1986 feel. Then it took five years to regain the previous peak. If the pain lasts that long, payouts will have to be sliced. 

Cheap oil comes with hidden risks for airlines

19 Jan 2015

Falling oil prices cut airlines’ fuel bills and will lift earnings this year. European carriers’ share prices are up, but weaker players will find it easier to stay in business so needed consolidation may slow down. Excess capacity could soon put pressure on ticket prices.

Guest view: Hard to spell Colombia without o-i-l

15 Jan 2015

Latam is exposed to varying degrees to the steep drop in the price of crude. Itaú economists expect Brent to rebound to $70 this year, but the uncertain outlook means Colombia has much to lose. Brazil, Argentina and Mexico can’t afford a prolonged slump. Chile is a clear winner.

Freeport-McMoRan has yet to fully settle M&A tab

15 Jan 2015

The U.S. miner’s $138 mln check to resolve a lawsuit over conflicts-riddled deals sets a precedent that gives shareholders more clout. It should turn up the heat on Chairman James Moffett, whose cross-holdings factored in the case. Better governance would enhance the big payout.

Oil price trough could be far away

13 Jan 2015

Petro-economics are painfully simple for producers. Lower prices hardly push up demand. And it will take a price below $30 a barrel before supply falls enough to balance the market. Unless producers can regroup into an effective cartel, their suffering will continue.

Cheap oil lubricates Li Ka-shing’s corporate rejig

12 Jan 2015

Asia’s richest man is shifting a 6 pct stake in Canada’s Husky Energy to his holding company as part of a broader shake-up. The move is vital to keeping Li’s grip on the telco-to-property empire. Though shareholders may object, the falling oil price has worked in their favour.

Petrodollar drought is new risk for markets

6 Jan 2015

Low oil prices are not only a blight for energy producers. They could hurt global financial markets too. After years of surplus petro-earnings gushing into a range of assets, notably fixed income, the flows are at risk of reversing. The sharp equity market fall may be a first sign. 

Edward Hadas: The oil price is just plain wrong

5 Jan 2015

At $55 a barrel, crude is still too expensive for the industry to be rational about development. But after the big price drop, some consumers will pay too little for a rational economy. And the market drama wastes resources. The right goals are a weak cartel and high user taxes.

Crude slump will stoke European oil and gas M&A

2 Jan 2015

The sharp drop in the price of Brent might make it harder to get deals done in the short term. But if the downturn persists, financial distress will put some small players in play. Larger, more defensive mergers, designed to create value by sharing costs, are also possible.

Oil glut cracks foundation of U.S. export ban

2 Jan 2015

Cheap gasoline could make lawmakers consider loosening the 40-year-old prohibition on crude exports. Plentiful oil may also force a rethink of ethanol and natural gas policies. Help for domestic producers smarting from low prices could even bring a rare show of Washington unity.

Clean sweep needed to restore trust in Petrobras

24 Dec 2014

The state-controlled oil giant is mired in a corruption scandal and has seen its stock plunge over the past year. Nothing short of firing current management and appointing more independent directors will allow Petrobras, and really Brazil, to restore credibility with global markets.