Oil & Gas

Capital Calls: McDonald’s ex-CEO fine

10 Jan 2023

Concise views on global finance: The Security and Exchange Commission’s decision to slap former fast food chain boss Stephen Easterbrook with a penalty is a convoluted way to the right outcome.

Cheaper gas is temporary salve for Europe Inc

9 Jan 2023

Warm winter days and enough reserves to offset Russian imports have halved the fuel’s cost. Yet Europe’s energy security also hinges on abundant liquefied natural gas purchases. As China’s fuel-guzzling economy reopens post-Covid, industrial giants like BASF may still suffer.

Capricorn mess mixes new and old ESG goofs

22 Dec 2022

Shareholders are angry at a takeover of the $950 mln oil group formerly known as Cairn Energy, months after they rejected a separate deal. It’s partly about price. But it also reflects investors’ new concern over environmental risks, and a very old dislike of poor governance.

Capital Calls: ADNOC chemicals push

21 Dec 2022

Concise views on global finance: The Abu Dhabi National Oil Company seeks to sharpen its focus on petrochemicals by buying a 25% stake in $16 bln Austrian oil group OMV.

EU pulls its punches on making polluters pay

20 Dec 2022

The bloc has expanded its emission trading system, but will allow heavy industry to enjoy free permits until 2034. Protecting European companies hit by high energy costs is understandable. Yet the freebies risks undermining a new carbon tariff, and the EU’s own green goal.

UAE will look to a world beyond OPEC

19 Dec 2022

The United Arab Emirates suffers from the oil cartel’s output restrictions. Distancing itself from the club would boost revenue and potentially attract more Western capital. President Mohammed bin Zayed al-Nahyan has a good moment to do so when he hosts the COP28 climate meet.

Anti-ESG movement has investment case

12 Dec 2022

American coal firms are generating so much cash that at current rates, it equals their market value, including debt, in under two years. Oil firms like Exxon could earn back their value in five. Even if recession squeezes profit and decarbonization looms, valuations are too low.

Capital Calls: Rio Tinto, Grocery delivery M&A

9 Dec 2022

Concise views on global finance: After a shambolic process, the $118 bln miner has succeeded in buying out the 49% of Turquoise Hill Resources it doesn’t own; Turkish grocery delivery player Getir gobbles up German rival Gorillas for $1.2 bln.

Exxon and Chevron give in a little to temptation

8 Dec 2022

The two oil giants plan to increase investment in shale next year, to a combined $39 bln, and reduce carbon intensity. Raising output and growing sustainability could even boost capital returns to investors. The worry is that the industry regains its taste for profligacy.

Eni’s $6 bln Neptune swoop will be a haggle-fest

1 Dec 2022

Italy’s $52 bln oil major may bid for the private equity-backed gas producer. Windfall tax and recession risks make the $10 bln price tag from last year’s mooted IPO unlikely. But Eni’s scope for synergies and need to pivot to gas give owners like CVC scope to hold out for more.

Venezuelan oil offers little to U.S. or Chevron

28 Nov 2022

The Biden administration eased sanctions, allowing the $355 bln fossil fuel giant to access reserves. But decrepit fields mean exports could be under 1% of U.S. demand, and the dirty fuel has limited appeal. Plus Chevron is printing money and doesn’t need Venezuelan oil.

EU gas cap is indirect signal to cut power demand

23 Nov 2022

The bloc’s proposed brake on natural gas prices at 275 euros per megawatt hour is a fig leaf. The ceiling is so high and with such stringent conditions that it may never be activated. Its main use may be to remind EU states their best option is to use energy more efficiently.

Energy crises speed up the green transition

22 Nov 2022

In 2022, war and power shortages have led to more fossil fuel use. But they also act as a catalyst for the rollout of renewable energy. In this edition of The Exchange podcast, ex-Snam boss Marco Alverà tells George Hay how Europe’s leaders can capitalise on this dynamic.

Recession-shy investors can turn to capital cycle

10 Nov 2022

As the world braces for an economic downturn, commodities have taken a hit. But oil and mining giants have been cutting investment for almost a decade, says Edward Chancellor. Supply shortages could allow these companies to buck the market downturn.

Capital Calls: Uniper

3 Nov 2022

Concise views on global finance: The German utility’s 40 bln euro loss for the first nine months of 2022 has turned its equity negative and implies a much larger bailout.

Texas’s worthless gas plays to Russian power

1 Nov 2022

The Permian is pumping nearly half of America’s oil – and with that a gas byproduct. As a result, prices are cheap or even negative. Building new infrastructure takes time and investment. American drillers will accommodate when profit exist. By then, the crisis will be over.

BP is case study in global windfall-tax quandary

1 Nov 2022

The $100 bln oil major wants to produce more green energy and less crude. Yet a British windfall tax risks pushing it in the opposite direction. A better levy design would hit outsized profit in both fossil fuels and renewables, while still incentivising investment in the latter.

Exxon and Apple are in a similar boat

28 Oct 2022

Exxon’s quarterly profit was its largest ever, at $20 bln, and nearly as high as Apple's. But the oil giant, once the world's most valuable firm, is worth a fifth of Apple. Newfound respect for earnings, and the recognition that beliefs are fleeting, could partly close the gap.

New Shell boss has scope for a green power splurge

27 Oct 2022

The $190 bln oil major could double net income to $40 bln in 2022. Rather than launching more buybacks, incoming CEO Wael Sawan could eye up a mid-sized European renewables player like $19 bln SSE. It would speed Shell’s green energy mission without messing up its finances.

Biden’s oil plan is a drop in a leaking bucket

20 Oct 2022

High gasoline prices are a big problem, but the U.S. president has little power to help. His plan to tap America’s oil reserve, and refill it at a price high enough to spur more drilling, is good economics – just not the kind likely to make much impact by November’s elections.