Oil & Gas

Eni shares blame for Saipem fiasco

30 Jan 2013

A shock profit warning from Eni’s 43 pct-owned oil services unit is the latest sign that the Italian oil major wasn’t keeping proper tabs on an important business. Eni doesn’t control Saipem outright, but consolidates its results. It should exercise more than distant oversight.

Cut-price Canada crude makes producers look cheap

29 Jan 2013

At $64 a barrel, the nation’s oil is the cheapest on the planet. A lack of pipelines, exacerbated by delays to Keystone XL and a drought along the Mississippi, is the cause. But the sell-off in shares of the likes of Canadian Natural Resources looks overdone.

Activist exposes Hess as latest governance villain

29 Jan 2013

Hedge fund Elliott reckons the U.S. oil company could be worth more than double its current $20 bln-plus value. But as at other energy groups, like Chesapeake and SandRidge, a too-cozy board has brought waste and strategic blunders. New broom directors would help change that.

Hess needs more than standard activist fare

28 Jan 2013

The $21 bln U.S. oil group is selling terminals and closing its last refinery just as activist hedge fund Elliott Associates is showing interest. Hess is already becoming a purer explorer. Closing the valuation gap with peers requires more than spinoffs or financial engineering.

Davos desperately seeking the next Internet

24 Jan 2013

Delegates at this year’s World Economic Forum want solid reasons to be bullish. And so the U.S. shale gas revolution has taken on an undeserved status as a Web-like catalyst for global change. In the echo chamber of Davos, semi-logical conclusions quickly become common wisdom.

Big Oil and MLPs on verge of beautiful friendship

23 Jan 2013

The likes of BP own mature wells that often don’t generate a decent return. Until now they had few options for offloading them. But the emergence of tax-exempt partnerships that pump oil and gas provides buyers that can pay top dollar and extract fat returns for investors.

Big Oil will struggle to buy more security

21 Jan 2013

The deadly attack on a BP and Statoil-operated gas field in Algeria underscores oil majors’ impotence. The companies would happily throw money at the problem, but corporate cash cannot buy safety. Tackling militant threats is an issue for governments, no matter how ill-equipped.

McMoRan flop makes Freeport bid more like bailout

18 Jan 2013

The U.S. explorer is bleeding cash after plowing $1 bln into a failing deep gas well. That makes the 74 pct premium offered by miner Freeport, whose chairman also runs McMoRan, look even richer - especially with gas cheap and abundant. Freeport’s shareholders are the losers.

Gazprom bid for Greek gas puts EU in a bind

15 Jan 2013

Brussels might not like that Gazprom and a little-known Russian power group are lead contenders in a Greek gas privatisation. But with Grexit fears lurking, it’s no wonder the sale hasn’t attracted more buyers. An unusual example of self-defeating policies at work.

Governance fixes don’t let Chesapeake CEO off hook

9 Jan 2013

New directors are cutting back outsized pay and perks at the U.S. gas driller. But cleaning house is separate from holding boss Aubrey McClendon to account for dodgy personal dealings. The only credible result of a lengthy board probe into conflicts of interest would be his exit.

Chesapeake sets unlikely governance reform example

8 Jan 2013

The U.S. gas firm’s revamped board slashed CEO Aubrey McClendon’s bonus to zero and reined in other perks. They’re overdue steps for Chesapeake, which has a long way to go to restore credibility. Still, there’s hope for similarly abused shareholders elsewhere in the oil industry.

Oil barons and tech hipsters share a dark side

7 Jan 2013

They seem so different. But SandRidge’s CEO and some peers jet around at shareholders’ expense, while at Facebook and Google founder-bosses are insulated from owners by super-voting rights. Clubby boards also feature in both sectors. The oil business may prove easier to clean up.

Macondo spill cost Transocean more than money

4 Jan 2013

The U.S. oil services firm will pay Uncle Sam $1.4 bln for its role in BP’s Gulf of Mexico disaster in 2010. That’s a modest sum. But shares in the $18 bln Transocean have lagged those of rivals in the meantime as it avoided heavy investment. It has a lot of catching up to do.

U.S. doesn’t need Washington for economic stimulus

27 Dec 2012

President Obama’s planned one-time jolt has been stymied. But a divisive corner of the energy industry has many hallmarks of a boost to the nation’s wallets. Shale oil and gas production pumped $140 bln into 2012’s economy. It won’t cure America’s ills, but it can ease the pain.

Fading power of oil autocrats will aid growth

24 Dec 2012

Democracies are starting to outclass countries like Iran, Venezuela and Russia in energy production. That should reduce the economic and political influence of such authoritarian states. The West’s booming output should steady fuel prices, a rare boon for the global economy.

Brazil’s ailing oil industry needs a nudge

13 Dec 2012

Petrobras can’t meet output targets. The fallout from Chevron’s spill is making it hard for companies to hire. And Eike Batista overhyped OGX, whose value has plummeted. The country’s once-promising oil bounty is going to waste. A revival may need fresh thinking from Brasilia.

Corporate carbon bubble may start to deflate

12 Dec 2012

Science points to the potential for climate shocks in burning through just current proven oil, gas and coal reserves. Stock-market valuations of miners and oil groups don’t reflect the risk of a policy response. In 2013, investors may wake up to a carbon-constrained future.

Freeport deal triangle gets cozier and cozier

7 Dec 2012

The mining group’s market value has plunged $6 bln following news of its foray into energy. Yet the chairman will come out ahead. Now it seems the boss of one target, Plains Exploration, will collect $130 mln and a pay rise. Freeport’s board owes shareholders an explanation.

Petrobras wrestles with local and global ambitions

6 Dec 2012

To play on the world stage, Brazil’s oil champion must branch out. That may be why it seems reluctant to sell Gulf of Mexico assets. Yet the company also needs cash for a domestic agenda that includes a $237 bln capex plan. With Brasilia’s meddling, Petrobras can’t have it all.

Freeport’s $20 bln splurge lives down to tradition

5 Dec 2012

The miner’s complex plans to buy oil explorers Plains and McMoRan swiftly erased $5 bln of value. Freeport Chairman Jim Bob Moffett also runs and partly owns McMoRan, which gets a rich 74 pct premium. The strategic and governance bravado affirm the industry’s Wild West culture.