Oil & Gas

Conoco’s $5 bln Kazakh sale is the easy part

26 Nov 2012

The U.S. oil giant’s investors should be happy to see the costly Asian project go. The cash also will help fund lavish capex plans and the generous dividend. But Conoco’s real chore is to prove it can boost sluggish output while retreating from promising, if risky, regions.

Obituary: Ewing was archetype of Reagan-era excess

26 Nov 2012

No American executive better embodied the anti-regulatory fervor and cutthroat ambitions of the 1980s than the former Ewing Oil chief. After an assassination attempt and two dark decades following the Texas oil bust his legacy was revived by, and lives on in, today’s shale boom.

Worry over state-owned acquirers may be overdone

23 Nov 2012

Canada’s prime minister, mulling CNOOC’s bid for Nexen, is skeptical of firms controlled by foreign governments. The fear is their motives are more than commercial. But evidence from nearly 200 deals suggests that if state buyers have a hidden agenda, they aren’t paying for it.

Chesapeake mini-me CEO’s days should be numbered

16 Nov 2012

SandRidge’s top shareholders make a solid case to oust boss Tom Ward, a co-founder of wobbly energy peer Chesapeake. Unless stopped, Ward plans to sell the firm’s best oil assets. And his outrageous pay - $25 mln, or half 2011 earnings - shows directors have neglected investors.

BP’s Macondo deal comes with criminal hangover

15 Nov 2012

A sigh of relief is in order at the embattled UK oil major. It settled with Uncle Sam for $4.5 bln - less than feared. But it’s not over. BP’s admission of criminal guilt in the 2010 Gulf spill could be used in a high-stakes civil trial. No wonder investors aren’t cheering.

China has easier path than buying West’s resources

15 Nov 2012

Companies from the PRC and elsewhere have met political flak trying to acquire U.S. and Canadian energy firms that hold oil and gas rights. A smarter strategy could be to snag know-how needed to unlock reserves at home. Oil services experts like $7 bln Weatherford fit the bill.

UK gas price probe another jolt to cosy markets

13 Nov 2012

Allegations that traders rigged UK wholesale gas prices, if true, would be another blow to the public’s faith in market indicators. Libor was bad enough. Anger at rising heating bills makes a gas scandal more politically explosive, even if the financial stakes look smaller.

U.S. energy autonomy leaves climate threat intact

12 Nov 2012

Booming output from gas and oil-rich shale should see the United States become energy-independent by 2035, according to the IEA. The geopolitical implications are huge. But despite gas’s cleaner, reassuring profile, the window for fighting destructive climate change is narrowing.

Chesapeake isn’t changing its spots fast enough

2 Nov 2012

A tougher board is supposed to be keeping spendthrift CEO Aubrey McClendon in check. Yet in the third quarter, capex fell only slightly as drilling costs rose, and Chesapeake added debt despite asset sales. Progress reducing reliance on gas isn’t enough to restore credibility.

Shell shares are justifiably expensive

1 Nov 2012

Despite some hiccups in the latest quarter, there was nothing in the Anglo-Dutch oil giant’s results to weaken its investment story. Shell has no shortage of opportunities to invest, a jump in cashflow lies ahead. The shares are pricier - but safer - than rival BP’s.

Exxon diversification masks ailing production

1 Nov 2012

A doubling of refining earnings helped the U.S. energy giant to a $9.6 bln Q3 profit - and a smaller decline from 2011 than pure explorers like Conoco. Exxon’s portfolio can be justified if different units smooth earnings. But in this case it’s hiding a losing bet on U.S. gas.

BG Group shows peril of sailing close to the wind

31 Oct 2012

The UK gas company’s shares fell 18 pct after predicting flat output next year due to project delays. That’s harsh. But without growth, richly valued BG is just another driller wrestling with debt and rising costs. A lost year will hurt credibility - and the trading multiple.

Eike Batista comes to his own rescue

26 Oct 2012

With his energy and infrastructure empire a mess, the Brazilian billionaire is trying to hold things together. He offered to buy $1 bln of oil company OGX stock at a premium and is also raising his stakes in two other units. In this case, shareholders should beware the buyer.

Conoco already falling behind new chosen peer

25 Oct 2012

After shedding its refineries in May, the energy explorer set its earnings to coincide with new rival Occidental. Conoco’s Q3 profit of $1.8 bln beat expectations. But output slipped, while at Oxy production increased 4 pct. Conoco has its work cut out to keep shareholders happy.

Rosneft buy may leave Russian oil industry wanting

24 Oct 2012

The country needs to enhance the efficiency of its lucrative oil business. Rosneft’s $55 bln swoop on Russia’s number-three producer might help, if TNK-BP’s superior oilfield know-how rubs off on the lumbering state-dominated giant. More likely, the deal will stifle competition.

Russian resolution helps put BP in play

22 Oct 2012

The UK oil major is exiting its fractious Russian JV for $12 bln in cash and 19 pct of state-backed Rosneft. If a settlement for the Gulf of Mexico disaster follows then BP will be free of poison pills. Factor in weak shares and wounded management and it’s an enticing bid target.

Spat with Exxon bad for Iraq – and oil consumers

18 Oct 2012

The U.S. major may exit the country’s top field, and Baghdad could push Exxon and others out of deals with Kurdistan. The tangle undermines hopes that Iraq could supply half the expected increase in world crude demand by 2035. Falling short would cost Iraqis and raise oil prices.

Rosneft offer could give BP cash flow headache

18 Oct 2012

The Russian state-owned group is about to make an offer for BP’s stake in TNK-BP. The UK oil major would lose access to the cash flows from its Russian joint venture. It would be better if Rosneft bought out BP’s oligarch partners. But Russian energy politics could preclude that.

U.S. energy boom spurs economic vs political clash

18 Oct 2012

Meaningful exports of oil are banned. But with output surging and crude fetching a 20 pct discount at home, producers want to ship it overseas - a red flag in Washington. There are similar reasons to export gas, but big practical hurdles. Unblocking trade could benefit everyone.

No need to dress up Exxon gas deal as an oil play

17 Oct 2012

The energy titan says it is buying Celtic to spur crude production. But the Canadian firm’s assets are 75 pct gas. The feint is understandable, given investor grumbling over Exxon’s splurge on gas producer XTO. With exports to Asia looking up, though, the $2.6 bln deal makes sense.