Oil & Gas

Euro zone powerless to avoid big oil divide

10 Apr 2012

Some euro members are more unequal than others in the face of rising oil prices. The hit to growth is greater in enfeebled and touristy countries like Greece, Ireland or Italy than in richer ones like Germany. And there’s little governments can do to alleviate the pain.

New image top priority for Conoco refining spinoff

9 Apr 2012

Phillips 66, the $30 bln-odd firm set to separate from the U.S. oil major on May 1, wants to be something else. Refiners get low valuations next to racier pipeline and chemical firms. But with 84 pct of Phillips’ capital tied up in refining, investors will take some persuasion.

Delta would be crackers to fly into refining

5 Apr 2012

Pricey fuel is the airline’s nemesis. But buying Conoco’s idled plant would increase Delta’s risk. It wouldn’t hedge volatile crude prices and would leave the company exposed to the financial challenges of running a refinery. There are better ways for Delta to cut its costs.

YPF folly could end up costing Argentina double

5 Apr 2012

If President Cristina Fernandez makes a grab for the country’s oil group, it’s unclear how she would reimburse majority owner Repsol. But even if the state managed to fork out a “fair” price, the cost of scaring off foreign investors would exceed any gain from nationalisation.

BP has yet to deliver its positive Macondo legacy

2 Apr 2012

The Gulf of Mexico disaster prompted soul-searching and a wide-ranging review of BP’s sprawling portfolio. The pledge was to divest low-return assets and focus on its core competence in exploration. But two years on and it’s clear the strategic renewal is proving a long slog.

Oil billionaire shows how to handle M&A conflicts

29 Mar 2012

Continental CEO Harold Hamm has persuaded the firm to buy another of his companies, Wheatland. That’s prime territory for stiffing shareholders. But both executives and the board appear to have played it fair. It’s a good blueprint for other firms, and Wall Street, to follow.

Sanctions could cost Iran $50 bln

29 Mar 2012

Top buyers of Iranian crude are cutting back and the government may soon have to offer discounts to shift supplies. The higher crude price would only partly counter these factors. Tehran could lose half its oil revenue and soon face the pinch.

North Sea blowout hardly justifies Total meltdown

28 Mar 2012

An out-of-control gas well off the UK coast has wiped 8.5 pct off the French oil major’s share price in three days. After BP, investors have acute fears about runaway deep sea disasters. But the reaction so far looks excessive.

U.S. energy debate has little to do with economics

27 Mar 2012

President Obama’s call to end big oil’s tax credits is mere political theater. Another $4 bln in tariffs for the industry won’t cure the deficit - and these firms do pay a fair whack already. But the counterargument that scrapping them will drive up gas prices is just as dubious.

Pricey exploration means dear oil is here to stay

27 Mar 2012

Handouts to restive citizens during the Arab Spring pushed up the break-even oil price for Middle Eastern states. Oil producers face a similar problem. The fact that the cost of extracting oil has tripled over the decade for private explorers is bad news for gas guzzlers.

Brazilian billionaire buys time from Gulf

26 Mar 2012

Eike Batista may be the richest man in Latin America’s biggest economy, but he runs a cash-hungry empire. His sprawling oil and mining group is in its infancy. The $2 bln infusion of patient Abu Dhabi money should help Batista try to make good on his promise.

Repsol shares betray leveraged Latam risks

23 Mar 2012

Shares in the Spanish oil major have lost more than 10 pct since troubles began in Argentina with its listed subsidiary, YPF. This looks overdone compared to YPF’s own market fall. But Repsol’s exposure to Argentina is bigger than it looks.

Chevron’s criminal scrape may backfire on Brazil

21 Mar 2012

A prosecutor in Brazil is chasing the oil titan for a spill about 0.1 percent the size of BP’s Gulf gusher. This over-reaction may reflect one lawyer’s ambitions. Still the fact that Petrobras has escaped such punishment will add to worries that outsiders face a double standard.

Saudi words won’t ease pressure on U.S. fuel prices

21 Mar 2012

Despite its reassurances, Saudi Arabia has imperfect options to prevent U.S. fuel prices from reaching risky levels seven months before the presidential elections. Sanctions on Iran, meanwhile, allow Riyadh to benefit from both strong oil prices and high production.

Tapping oil stockpiles could turn into bad habit

15 Mar 2012

With U.S. fuel prices near the politically risky $4-a-gallon, Britain and the United States may release strategic reserves. It would be the second time in as many years authorities have done so. Emergency stashes should be for real supply emergencies. Iran isn’t causing one yet.

Qatar forms a taste for foreign strategic assets

15 Mar 2012

After eyeing European aerospace and defence firm EADS, Qatar has snapped up a $2.6 bln stake in French oil major Total. That is a poor diversification of the Gulf state’s hydrocarbon wealth. But it might be an effective way for Qatar to shore up influence with its gas customers.

U.S. energy nationalism soft spot could be gas

8 Mar 2012

Seven years after jingoism prevented CNOOC from buying Unocal, Chinese companies remain on the prowl. So far, they have been content with joint ventures. And high oil prices would make acquisitions difficult now anyway. But foreign buyers may find America less protective of gas.

Exxon fears hammer home risks of Kurdish oil rush

6 Mar 2012

Speculation the U.S. major may not enter Iraqi Kurdistan after all has pummeled shares in the region’s oil companies, including a 24 pct drop in Gulf Keystone. Exxon was meant to break the political impasse in Baghdad, without which big energy bets in the region may be off.

ECB cash palliates crisis but drives up oil price

5 Mar 2012

The euro zone’s crisis has been eased by a trillion euros of financing from the European Central Bank. But this easy money comes with major risks. It has helped drive up the oil price, indirectly funds deficits and, as Germany fears, could bring inflation and a debased currency.

BP’s big opponents may blink next

5 Mar 2012

The oil major’s Gulf of Mexico deal neutralises one set of plaintiffs – with a modest increase in expected payments. And if the injured parties are happy, U.S. federal and state governments are more likely to agree to fines which BP can bear without too much more pain.