Oil & Gas

Fracking’s big benefit may be steadier oil prices

21 Jan 2014

Despite a price slide since the year-end, crude volatility is at 20-year lows. One explanation is the U.S.-centric shale boom. There’s more oil around, and drillers can respond more quickly to price moves. A damper on price swings should help companies and governments plan ahead.

Shell’s profit warning shows way for new CEO

17 Jan 2014

The oil and gas major blamed refining woes and high exploration costs for its fourth-quarter profit miss. It comes on top of a string of disappointing results. The worry now is that Shell won’t generate enough cash to hit its targets. The group’s new boss has his work cut out.

Gas deal means Brazil can also be seen from Alaska

16 Jan 2014

Sarah Palin’s gubernatorial successor has signed a deal for the state to take an equity stake in a $45 bln LNG project. The Last Frontier seems the last place likely to get entangled Latam-style with Exxon, BP and others. Oil production is falling, though, leaving fewer options.

Supreme Court’s iffy economics cheat investors

15 Jan 2014

The top U.S. tribunal assumes prices of listed shares reflect all public data - even lies. That allows owners of widely traded stock to sue en masse for fraud but cuts out others. A Halliburton lawsuit gives the justices a chance to rethink the rules and focus on duped investors.

U.S. natural gas price finally reaches safety zone

15 Jan 2014

At near $4.50 per mln Btu, drillers can turn a profit on gas after several painful years. Cold weather has helped push up the price, but with demand rising it’s more than a blip. Meanwhile, production costs have come down. The likes of Exxon and Chesapeake can breathe easier.

Hard to find phoenix in ashes of Batista’s empire

6 Jan 2014

Despite the real assets buried under the collapsed EBX Group, the flagship oil explorer will emerge from bankruptcy with poor growth prospects. Investors already have priced in big things for the port and electricity arms. And too much depends on a resurgent Brazilian economy.

Rail crash shows why Dakota oil boom hard to match

3 Jan 2014

With no casualties, the fiery derailment of a crude-laden train will soon fade from view. But North Dakota’s mix of huge reserves and low population is rare. The Bakken shale’s sevenfold output surge since 2007 isn’t easily reproducible in places where people actually live.

Oil’s new age of plenty challenges old assumptions

27 Dec 2013

Cheap shale, cheaper renewables, and increasing efficiency are creating a glut of non-OPEC crude, and bringing forward the peak of fossil fuel demand. Even if energy prices don’t fall sharply, there will be more volatility in oil prices, energy investments and geopolitics.

Ukraine’s Russian lifeline means European pain

18 Dec 2013

Vladimir Putin has agreed to buy $15 billion worth of Ukrainian bonds and to sell gas to Kiev at a discount. The deal gives relief to Russia’s troubled neighbour but costs Moscow little and buys valuable influence. Pro-EU demonstrators in Kiev and other cites won’t go home soon.

Shale energy deficit will hit Europe hard

17 Dec 2013

American companies have a big advantage over European counterparts: abundant, cheap gas. Fracking is more difficult in Europe and requires a step-change in public perception. Cheaper energy could provide the old continent with the fillip it needs. But it’s a pipedream. 

McClendon IPO plan is echo of bad old Chesapeake

16 Dec 2013

He lost his job as CEO of the energy firm over spending and conflicts. A new $2 bln venture would allow him to cherry-pick assets ahead of his investors and reward him generously. Despite McClendon’s knack for buying oil and gas properties, investor skepticism is in order.

Exxon’s world view looks darn good for Exxon

12 Dec 2013

In its closely watched industry outlook, the $400 bln gorilla sees natural gas usage surging 65 pct by 2040 and a bigger jump in shale oil. If right, that would support Exxon’s costly acquisition of XTO four years ago. Even then, however, the deal might not stack up financially.

Small cracks in U.S. crude ban aren’t enough

12 Dec 2013

America is granting a record number of oil export licenses, skirting a 100-year moratorium. But with output up 56 pct since 2008, this ensures the U.S. sells only a trickle abroad. That contributes to an $11 per barrel discount that harms drillers and America’s trade balance.

Proponent is odd part of $27 bln Canadian oil plan

26 Nov 2013

A west coast refinery to process domestic crude into products for Asia makes decent sense. What’s headline-grabbing is that the idea comes from David Black, a newspaper mogul, not from an energy specialist. Despite hints of Chinese financing, that makes the proposal seem flaky.

Iran deal offers the world a ray of hope

25 Nov 2013

Turning the accord to curb nuclear activities into a lasting solution won’t be easy, but diplomatic goodwill makes it harder to go backwards. Reintegrating Iran into the global economy would have profound consequences. For now, the agreement reduces geopolitical risk.

Fracking fortunes put naysayers on back foot

22 Nov 2013

The number of million-dollar earners in oil-rich North Dakota has almost doubled in a year. Average incomes are booming, too. Such wealth makes it easier to brush aside ecological worries over fracking. But smart policy doesn’t need to choose between regulation and profit.

Blackstone’s $6 bln oil deal signals another peak

20 Nov 2013

The sale of private equity-backed GeoSouthern to Devon comes at a toppy per-acre price. Blackstone has a knack for timing, evidenced by its own IPO and a record real estate transaction. The glut of undeveloped land owned by oil companies suggests finding buyers will get tougher.

Shale boom, EM growth to put refining on back foot

19 Nov 2013

Rising U.S. crude production and Asian demand are set to reshape global oil flows over the next two decades, according to the IEA. Changing trade patterns create opportunities for middlemen. But they’re bad for Western refiners, which face dwindling demand for locally produced products.

Lower inflation can spur global growth

15 Nov 2013

The trend towards lower inflation rates is unlikely to end in massive global deflation. There may be a risk in the euro zone, but most disinflation is a healthy response to falls in oil and commodity prices. Consumers and growth will benefit. Policymakers shouldn’t panic.

Peru swaps Brazil’s oil loser for China’s

13 Nov 2013

Petrobras is selling fields that pump about 16 pct of the tiny nation’s crude to PetroChina. Little distinguishes the two state-controlled titans. The inefficient Chinese group has lost $750 bln of market value in six years. Peru shouldn’t expect much of a partnership upgrade.