Oil & Gas

Shell struggles with market myopia

26 Jul 2012

It was never going to be a stellar quarter after the recent fall in oil prices. But Shell’s big Q2 miss is a blow, particularly after its dividend disappointed some investors in Q1. Few oil majors look better-positioned for the future, but expectations-management needs work.

Conoco underlines rich nations’ oil resurgence

25 Jul 2012

The company’s first earnings report as a refinery-free driller made much of surging production in the U.S. and other developed economies. The trend reflects a renewed focus on resources in the rich world as opposed to emerging markets. While it lasts, it’s less risky for Big Oil.

BP finally gains leverage in Russian divorce

24 Jul 2012

The UK major’s estranged oligarch partners in TNK-BP have thwarted its ambitions in Russia. But BP now says Rosneft could buy its 50 pct stake. That would upset the other owners, who would lose influence. After months of stumbles, BP at last has a chance to regain the initiative.

China Inc not letting politics get in way of M&A

24 Jul 2012

A once-a-decade changing of the Communist Party’s top guard was supposed to hold back the ambitions of state enterprises, at least temporarily. But CNOOC has now kicked off a hefty $15 bln outbound takeover. Maybe, seen from Beijing, there’s no such thing as a bad energy deal.

CNOOC has work cut out to justify Nexen premium

23 Jul 2012

At $17.9 bln, the Chinese oil giant is valuing its Canadian rival’s enterprise at almost 4.5 times estimated 2012 EBITDA. That’s on par with Nexen’s peers even though it has been trading at a big discount. For CNOOC to get its money’s worth will require a major turnaround.

CNOOC pulls out stops to make Nexen bid palatable

23 Jul 2012

The Chinese oil giant is paying $15.1 bln for the Canadian producer, a whopping 61 pct premium. The deal also comes with sweeteners to placate protectionists, including CNOOC promises of a secondary HQ in Calgary and a listing in Toronto. It will be hard for Ottawa to say no.

GE’s carve-up efforts remain half-hearted

20 Jul 2012

The $210 bln conglomerate is hacking its energy arm into three after doing the same with another division in 2010. Cost savings would be worth only some $300 mln. Maybe CEO Jeff Immelt, who has presided over a halving of GE’s share value, will warm to a breakup on a bigger scale.

Chevron doubles down on Chavez staying power

20 Jul 2012

Venezuela’s bond yields have gyrated with investors’ changing views of the strongman’s cancer survival odds. But Chevron’s $2 bln loan to the state oil giant is a clear bet on Chavez’s re-election and survival. His shadow may darken the nation’s economic outlook for a while yet.

Repsol making the best of a bad situation

20 Jul 2012

The Spanish oil major is shedding non-essential assets and striking clever financing deals in the wake of the YPF fiasco. Selling cash-cow liquefied natural gas assets could raise up to 3 bln euros to plow into upstream growth. It’s not a bad response to tricky circumstances.

Russian oil needs more than Putin’s tax tweak

18 Jul 2012

The oil reserves of Russia are twice those of the U.S. Yet output is only rising half as fast. A penalising tax code that discourages drilling for harder-to-reach oil is to blame. Making exceptions for the likes of Exxon is no substitute for bold reform.

Cove game could end with a knockout

16 Jul 2012

The five-month battle for Mozambique gas explorer Cove Energy is coming to a head. Big new finds have increased the stakes in the bidding war between Shell and Thailand’s PTT. PTT’s May offer of $1.9 billion is the highest on the table. But the UK major can almost certainly top it.

Divided ConocoPhillips may yet win over investors

13 Jul 2012

It has been a year since CEO Jim Mulva vowed to unlock value by splitting exploration from refining. His timing was off, though. Jittery shareholders seem to want the safety of diverse income streams. Separated, the shares lag conglomerate peers. But Mulva should be vindicated.

Norway strike challenges crude complacency

9 Jul 2012

Usually the Nordic country barely figures on the list of risks to crude supplies. But striking workers and a threatened production shutdown have contributed to Brent’s march back towards $100 a barrel. It’s a reminder of oil’s ability to surprise, even when demand is weak.

OPEC spendthrifts can’t blame cheap oil for woes

6 Jul 2012

Venezuela and Iran want an emergency cartel meeting, claiming overproduction is depressing prices. But despite the recent fall, crude is, at $98 a barrel, near its highest level in decades. Only profligacy prevents OPEC nations balancing their budgets at that price.

Brazil’s richest man overpromises, underdelivers

28 Jun 2012

Billionaire Eike Batista is swiftly falling from favor. His flagship oil company OGX lost 25 pct of its value Wednesday after massively cutting output expectations. Batista is a savvy salesman and wheeler-dealer but his failed promises are building up rapidly. Investors beware.

Oil markets could snap at the shorts

26 Jun 2012

After Brent’s rapid collapse from $126 to $90 a barrel, oil traders appear to be dismissing Iran risks and China’s ability to stimulate growth. And today’s picture of excessive Saudi production and sputtering global demand could change by year-end if Europe muddles through.

Chesapeake leaves investors wondering what’s next

25 Jun 2012

The U.S. gas producer is feverishly trying to dispel a cowboy reputation, including by shaking up the board. But emails suggesting Chesapeake colluded to buy land on the cheap are a setback. With all that’s happened so far, it’s also hard to believe this scandal will be the last.

Chesapeake gets short-term gravitas at the top

21 Jun 2012

At 73, former Conoco boss Archie Dunham can’t have plans to stick around and unseat Aubrey McClendon from the energy empire he has built. So investors are disappointed. But he does have his legacy to protect and the god-given heft to keep Chesapeake’s reckless founder in line.

Pemex can’t shake stigma of state-run cheapskate

20 Jun 2012

The Mexican oil company just held a second disappointing wells auction. But investors lapped up its $1.75 bln sale of 32-year debt. The contrast shows that potential partners still have little faith that Pemex can be more than a cash cow for creditors and its government owner.

Jilted Air Products gets only a consolation prize

19 Jun 2012

Since the U.S. hydrogen producer’s hostile bid for Airgas failed last year, it has lagged rivals. Its former prey’s dramatic outperformance exposes the $5.8 bln offer as too stingy. A smaller deal in Chile may help Air Products revive growth but is a poor Airgas substitute.