Oil & Gas

French protesters have a point on wages

20 Oct 2022

Inflation running at 10.9% is eroding European workers’ salaries. Companies benefitting from a power crisis, like 139 bln euro TotalEnergies, can afford pay hikes. For others, one-time bonuses are a better way to keep workers happy and cushion the downside of looming recession.

Time for Europe to tame its energy cravings

19 Oct 2022

After paying through the nose to fill its gas storage reserves to 92%, the bloc is seeking to secure more affordable fuel. Measures like curbing price volatility, club purchases or flexible caps will be no panacea. While supply is tight, curbing demand is the key.

Europe’s energy crisis nears winter of discontent

18 Oct 2022

Germany, Italy and others have scrambled to replace Russian gas and pipeline attacks have become a concern. The Oxford Institute for Energy Studies’ Jack Sharples tells The Exchange podcast Europe must learn to live with less power. Next year may be even more challenging.

Total’s Russia foot-dragging is investor problem

18 Oct 2022

The French energy giant owns a stake in gas group Novatek, and is in theory entitled to a $430 mln dividend. CEO Patrick Pouyanné won’t say whether he’s selling. He may hope that long-held Kremlin ties can secure a clean exit, but the uncertainty is a shareholder concern.

Abu Dhabi would be a logical owner for Gunvor

4 Oct 2022

ADNOC, the emirate’s huge oil company, is interested in the privately held commodities trader. Gunvor’s valuation involves guesswork, and it used to be owned by a target of U.S. sanctions. But the UAE could use the group’s roster of gas client relationships, and it has the cash.

German energy bailout belatedly outclasses Europe

30 Sep 2022

Berlin will borrow 200 bln euros to help consumers cope with rocketing energy prices. It’s not the first state to go for a shock and awe approach, but Germany’s ample fiscal space gives it way more scope to go big. Unlike the UK, it can also do so without spooking investors.

Capital Calls: Chevron, Pickleball

29 Sep 2022

Concise views on global finance: The oil driller has sold its California headquarters building and is moving employees to Texas, while one of the fastest-growing U.S. games is beefing up its professional ambitions with an investment from basketball superstar LeBron James.

Ukraine has more pluses than minuses for climate

26 Sep 2022

The Russian invasion has prompted other countries to boost gas production and burn more coal. Climate diplomacy is on ice. But this crisis will also prompt a dash for cheaper and more secure renewable energy. That helps the fight to slow global warming, says Hugo Dixon.

Uniper’s new bailout mixes scars and consolations

21 Sep 2022

Germany’s 8 bln euro capital injection heavily dilutes the stricken energy group’s investors and hands main shareholder Fortum a big loss. The Finnish group does gain from exiting the mess, and Berlin might one day profit from the rescue. But neither side will be celebrating.

Net zero woes go beyond lack of global cooperation

20 Sep 2022

The International Energy Agency frets that poor collaboration between states will keep emissions high. But the struggles of green groups like ITM Power suggest countries aren’t doing enough to help domestic markets either. Energy policy needs to do more than fight today’s crisis.

Petrodollar rush may disappoint Western financiers

20 Sep 2022

In prior energy booms, like in the 1970s, the proceeds wound up in U.S. banks and bonds. OPEC’s $907 bln haul in 2022 is smaller, and winners like Saudi Arabia need cash to pivot away from oil. Bankers may not see a developed world equities and debt bonanza on the same scale.

Mukesh Ambani pulls off one shade of overseas M&A

19 Sep 2022

The boss of $212 bln Reliance has so far failed in his hot pursuit of big flashy targets, the types of deals that tripped up his tycoon rivals a decade ago. Ambani’s quiet penchant for buying foreign technology to further his domestic clean energy goals looks much smarter anyway.

Oil price cap will harm, not help, Asia

15 Sep 2022

The U.S. says countries ignoring a G7-led price cap against Russia can leverage it to negotiate discounts. But even if the policy works and lowers short-term prices, India and China’s massive long-term oil needs make it risky to mess with price signals that spur fresh supply.

Europe can shrug off Putin’s Chinese gas Plan B

14 Sep 2022

With exports to its key European market shrinking fast, Moscow hopes to hike gas exports to the People’s Republic. But last year these were just 7% of EU sales, and logistics and sanctions complicate the shift. It need not deter Europe’s talk of a Russian gas price cap.

Capital Calls: Oil vs. ESG

13 Sep 2022

Concise views on global finance: The price of a barrel of Brent crude has fallen 30% since mid-summer, and over 10% in two weeks. If it stays below $100 a barrel, oil companies will start to become worse investments. That could help solve backlash to ESG investing.

Europe energy fallout will cascade down the years

12 Sep 2022

The gas crisis is a long-term problem which will make the region poorer and less competitive while saddling it with higher public debt. Dealing with this as well as high inflation will cause further political ructions which will cascade down the years, says Hugo Dixon.

America exports natural gas, imports high price

9 Sep 2022

The commodity’s prices have historically been tied to local dynamics. But the U.S. fracking business has made America a huge exporter. Domestic costs are now at a more-than-a-decade high. With capacity constrained and demand for U.S. gas rising elsewhere, prices will remain high.

Norway gas lifeline for Europe is the smart move

9 Sep 2022

The staunch NATO ally supplies 25% of the European Union’s gas needs and nearly half Britain’s. A trebling of oil cash and record profit at energy giant Equinor give Norway scope to cut the EU some slack on gas prices. The discount size is less important than the gesture.

Stingy investors make for dry M&A oil patch

8 Sep 2022

Even though fossil fuel companies are the best performers in the S&P 500 Index, deals have dropped more than 10% this year. That’s partly because oil and gas companies are better suited to deals when cost-cutting is a priority. But it’s also because funding has become expensive.

UK energy bailout leaves key details in the dark

8 Sep 2022

New Prime Minister Liz Truss plans to cap power bills for two years at a likely cost of over 100 bln pounds. It’s unclear how the scheme works, who pays the bill, or what restrictions suppliers will face. What’s certain is Britain has moved further away from a free energy market.