Oil & Gas

Kurdish oil clash involves unlikely tough guys

22 Jul 2013

M&G and Capital Group are hardly limelight-hogging activist shareholders. Yet the two have forced four directors onto Gulf Keystone’s board, after a war of words with the Kurdistan-focused oil explorer. UK investors rarely reach for this weapon, but it’s good to know it works.

Chevron’s Argentine energy gamble not so reckless

17 Jul 2013

The energy group is wagering $1.24 bln on a shale project just a year after the nation seized assets from Spain’s Repsol. That shows a strong stomach not a short memory. With the world’s No. 2 gas reserves on offer, Chevron’s audacity may help it outflank fainter-hearted rivals.

Batista’s house of cards is too clever by half

11 Jul 2013

The Brazilian sometime multi-billionaire may now lack the $1 bln pledged to OGX. Other group companies dependent on the oil explorer could suffer as a result. Batista’s interlocking realms, along with Babcock & Brown and other too-smart creations, serve as a warning to investors.

New Shell CEO has right skills for tough times

9 Jul 2013

The best CEOs combine charisma and vision with operational nous. Ben van Beurden’s CV suggests he’ll work more on efficiency gains than corporate re-imagining. That suits a huge company in today’s resource industry, where reliability is crucial and mega-projects are the norm.

Canada rail crash adds green hue to oil pipelines

8 Jul 2013

No way of transporting crude is perfectly safe. But a fatal train accident in Quebec draws attention to the dangers of blocking pipelines – which are about five times safer than trains. Without lines like Keystone XL, oil producers will resort to riskier and dirtier methods.

Chesapeake discovers price of costly quest for oil

3 Jul 2013

The embattled driller is offloading another $1 bln of assets. It needs cash because even though Chesapeake has found more U.S. crude than any rival, including Exxon, in recent years, it spent too much to do so. Founder Aubrey McClendon may be gone but his painful legacy lingers.

Third time lucky looks a stretch for Eike Batista

1 Jul 2013

The Brazilian billionaire’s EBX group may soon crash. He bounced back from financial disaster before. But now he’s wiped out $50 bln of value in three years after borrowing oodles to expand quickly. Investors share some blame. But now they’ll surely be too wary of Batista.

EU pipeline dream dies of natural causes

1 Jul 2013

Nabucco, Europe’s pet pipeline project, is dead. Conceived as a way around the continent’s Russian gas dependency, it was unable to adapt fast enough to changing gaspolitik and lost to a smaller, cheaper challenger competing to bring Caspian gas to the continent.

Repsol can wring a better deal for losing YPF

27 Jun 2013

The Spanish oil major had to snub Buenos Aires’ tentative compensation offer for the expropriation of its Argentinian subsidiary. It wants $11 bln. The state’s package wasn’t worth the $5 bln ascribed to it. Repsol may never get full recompense. But it can hold out for more.

Spinoff wave reaches the Dead Sea

26 Jun 2013

Corporate carve-ups are all the rage. Now Israel’s richest man is joining in. Unravelling his sprawling Israel Corp will be complex but worthwhile. There are still countries where conglomerates make sense. But where capital is easily available, markets much prefer simplicity.

Novatek wins big in Russian energy deal-a-palooza

21 Jun 2013

A $270 bln oil supply deal between Rosneft and China has stolen the spotlight, but upstart gas producer Novatek’s smaller deal to ship natural gas to the mainland may have been the bigger news on Russian energy this week. Gazprom’s export monopoly looks truly over.

SandRidge flouts good governance to bitter end

20 Jun 2013

The embattled oil explorer succumbed to a shareholder uprising and replaced boss Tom Ward. But the board is giving him some $90 mln on the way out and installing the tainted CFO and lead director as CEO and chairman, respectively. It isn’t exactly a fresh start.

Enlisting China underscores the Petrobras crunch

19 Jun 2013

Brazil’s state-controlled oil company is being forced to sell fuel at a loss to restrain inflation. The government also wants Petrobras to pump $65 bln into the economy by investing in refineries. Involving China’s Sinopec as a partner may help but such aid can’t be coming cheap.

Eni could be better off holding on to Saipem

19 Jun 2013

The Italian oil major probably wishes it didn’t own 43 pct of Saipem, the struggling oilfield contractor. Ditching the unit was politically tricky before a string of profit warnings. Now, with investor faith in Saipem crumbling, Eni’s least-bad option may be to keep it.

Mexico leader’s Pemex reform doesn’t quite hit it

18 Jun 2013

President Enrique Peña Nieto wants to end the state-owned firm’s oil exploration monopoly. But his overhaul still limits foreign access, a nod to nationalist concerns. That could impede increasing Mexico’s slipping oil output – a core part of Peña Nieto’s reformist agenda.

Brazilian oil troubles stay all in the family

18 Jun 2013

First, BTG Pactual extended credit to Eike Batista’s struggling empire. Now, the investment bank led by Andre Esteves has emerged as the unlikely buyer of assets from state-controlled Petrobras. The sketchy details on both deals only add to the unhealthy aura of crony capitalism.

False modesty best hope for divorcing billionaire

14 Jun 2013

The estranged wife of oil baron Harold Hamm stands to gain a big chunk of his $11 bln fortune. His defense may be one no CEO would ever deign to admit outside of divorce court: much of his wealth is owed to good fortune, and rising oil prices, rather than exceptional management.

Hands-off approach wins governments more oil

13 Jun 2013

That’s the lesson from BP’s latest survey, which shows U.S. crude production surging by a world-beating 14 pct in 2012. Another private-sector industry, Canada, came close behind. State-dominated oil giants in Brazil, Venezuela and elsewhere suffered declines. Market forces work.

Centrica’s UK shale punt is suitably restrained

13 Jun 2013

Britain’s biggest energy supplier will pay up to 160 mln pounds for a quarter of a big shale prospect. The price looks fair. Shale could help the UK offset declining North Sea output, but the opportunity is unproven and barriers to industrial-scale production are formidable.

Shale offers China exit from U.S. dependency curse

13 Jun 2013

The Middle Kingdom now imports over half its oil and a fifth of its gas. The U.S. – where shale output is curbing a longstanding reliance on foreign fuel – points to a solution. China needs to overcome water shortages and vague licensing rules to emulate America’s success.