Oil & Gas

Apollo may quadruple its money on oil start-up

11 Jun 2013

The buyout firm is taking Athlon public just three years after drilling $400 mln into it. With EBITDA set to double this year and possibly next, the oil explorer may be worth $2 bln. With such returns, it’s no wonder Apollo boss Leon Black wants to sell anything not nailed down.

Privatisation snag could push back "Grecovery"

11 Jun 2013

Athens will have to lower its privatisation revenue targets for 2013 after a tender for state-controlled natural gas company DEPA attracted no bids. Coming after some good news, this setback will hit confidence as well as revenue. The Greek recovery could be delayed yet again.

Cave-in at home may harden Gazprom resolve abroad

4 Jun 2013

The Russian group has dropped a requirement that its domestic clients pay for the gas they don’t use. That may encourage more European customers to demand the same treatment. But as Gazprom becomes more reliant on overseas profit, it will be less inclined to compromise.

Efficiency revolution would put shale to shame

4 Jun 2013

Even without fancy new technology, better energy efficiency could save Americans 23 million barrels of oil per day by 2050, twice Saudi Arabia’s output. But investments are inadequate, even though they should be profitable today. Blame bad information and skewed incentives.

Total’s investor apathy holds back governance reform

30 May 2013

A $400 mln payment to authorities helps the French oil major avoid a U.S. trial over alleged bribes. While French prosecutors want to put the CEO in the dock, investors are apathetic. That’s too bad, because the imbroglio is an opportunity to rethink Total’s cosy governance.

Export approval may rev up U.S. natural gas prices

29 May 2013

Rates have fallen to a low idle since peaking five years ago. But renewed overseas sales should boost demand and give prices some oomph. Freeport LNG just received the first export license granted since 2011. With more on the way, drillers finally have reason to cheer.

Brazil’s oil ambitions put squeeze on Petrobras

28 May 2013

The government is auctioning a 12 bln-barrel crude field to revive its goal of being a global player. Petrobras is guaranteed a 30 pct stake. That should be good news. But the project will add more debt and expenditure for the already struggling and overleveraged state oil giant.

Frackers ignore German beer angst at their peril

24 May 2013

Germany’s brewers want to make fracking verboten. In the U.S., the gas drilling technique’s economic benefits trump environmental concerns. Whether it’s the British countryside or German lager, threats to cultural touchstones will hold back a similar boom in Europe.

Yamal LNG set to inflict pain on Gazprom

24 May 2013

A gas project in Russia’s far north could crack the state giant’s export monopoly. The Kremlin is expected to decide soon whether to allow Yamal LNG’s backers to ship its production abroad. It may only approve sales to Asia. But even limited exports would hurt Gazprom.

The refining business may yet pay off for Delta

22 May 2013

The biggest U.S. airline’s decision to buy a refinery a year ago looked barmy. Yet there are signs that for the price of a Boeing 777, the deal is helping reduce Delta’s $12 bln fuel bill in meaningful ways. Just shaving a nickel off jet fuel prices justifies the purchase.

Did Brazil miss a trick on Petrobras bond sale?

17 May 2013

President Dilma Rousseff uses the oil giant for many nationalistic purposes, though strengthening domestic capital markets isn’t apparently one. Issuing a slice of this week’s $11 bln bond offering in reais, though costly, would at least have been a better sort of meddling.

Oil probe shows the slippery nature of prices

16 May 2013

Even if the EU probe into the manipulation of published energy prices comes to nothing, it highlights a strange market. In the global energy trade, billions of dollars change hands on the basis of “best guess” benchmarks. More is at stake than fines for rogue traders.

Oil price collusion would be a Libor-scale scandal

14 May 2013

EU authorities are probing whether traders in oil majors conspired to rig published energy prices. Oil benchmarks are supposedly harder to manipulate than bank rates, so this could be a big deal. Even if no collusion is found, it makes a review of arcane price-setting mechanisms more urgent.

Oil patch excesses tar all players with same brush

14 May 2013

Continental’s board reckons it struck the best deal possible when committing $96 mln to a pipeline its own CEO is building. But rival firms’ governance abuses make that hard to swallow. Eschewing all side deals with company bosses is the best way to avoid the taint of conflicts.

Review: Ideology pollutes U.S. oil and gas debate

10 May 2013

Fracking and the sliding cost of renewable energy offer America a chance to curb reliance on foreign fuels and boost growth. But pointless partisanship puts these gains at risk, says Michael Levi in “The Power Surge.” Democrats and the GOP can at least agree to avoid mutual sabotage.

Shell must hope Voser successor mimics his ways

2 May 2013

The outgoing CEO’s anti-bureaucratic style and distaste for corporate adventurism put the Anglo-Dutch major back on course after its 2004 reserves scandal. His tenure shows how the steady approach benefits resource shareholders. Too bad the board couldn’t keep him in post.

Chesapeake’s revival hampered by fire-sale prices

1 May 2013

The U.S. energy explorer trimmed costs after ousting spendthrift boss Aubrey McClendon. That, along with strong oil output, helped it beat Q1 forecasts. But Chesapeake still piled on $1.3 bln more debt, which may necessitate selling more energy-rich land at not-so-awesome prices.

BP’s Russian honeymoon isn’t the end of the story

30 Apr 2013

The UK major’s results show a turnaround strategy that is gaining momentum. The first profitable days as 20 percent owner of Russian oil giant Rosneft are welcome. How boss Bob Dudley’s manages the new relationship is key to whether BP can shrink to greatness, or just mediocrity.

Oxy gets religion only after boss has had his fun

29 Apr 2013

Allowing ex-CEO Irani to remain chairman at $46 mln a year caused turmoil at oil firm Occidental. In future, the board says, outgoing chiefs will be shown the door. Shareholders may cheer. But oil executives are often only willing to do the right thing as they prepare to leave.

Hot Aussie economy could tarnish Chevron’s future

26 Apr 2013

The oil giant is poised for better output growth than rival Exxon. But it is more active Down Under, where a strong currency and a crowded market have pushed the cost of its shared Gorgon LNG project up 40 pct to $52 bln. Runaway capex is a risk to an otherwise bright outlook.