|Bid||52.50 x 20000|
|Ask||53.00 x 20000|
|Day's Range||51.50 - 51.50|
|52 Week Range||49.00 - 58.50|
|Beta (5Y Monthly)||0.84|
|PE Ratio (TTM)||10.25|
|Forward Dividend & Yield||1.69 (3.29%)|
|1y Target Est||N/A|
(Bloomberg Opinion) -- The long-threatened U.S. sanctions against Nord Stream 2, Russia’s $10.5 billion natural gas pipeline to Germany, will finally take effect next week, but their timing and design can only slow down the project’s now-certain completion. Even so, Ukraine, the primary injured party from the new pipeline, is grateful for small favors from Washington.The sanctions — crafted by Senators Ted Cruz, Republican of Texas, and Jeanne Shaheen, a New Hampshire Democrat — have been attached to the 2020 National Defense Appropriations Act, which already has been approved by Congress; President Donald Trump has promised to sign it. The State and Treasury Departments will have 60 days to present to Congress a list of vessels involved in the construction of Nord Stream 2 and another Russian pipeline, TurkStream, and of people and firms that provided these ships. Those people and entities will have 30 days to wind down their business or they will be barred from entry to the U.S. and could have their assets frozen.The sanctions come too late to hurt TurkStream, which runs under the Black Sea to the western area of Turkey. The underwater part of the pipeline is complete and even filled with Russian natural gas. Turkish President Recep Tayyip Erdogan has said the pipeline would be operational in early January.Nord Stream 2, a twin pipeline running under the Baltic Sea that allows Russia to avoid shipping gas overland through Ukraine, is another matter. Gazprom, the monopoly exporter of Russian pipeline gas, originally intended to complete it by the end of the year, and still had a chance to do in late October, when the Danish government gave permission to lay pipe in its waters. But inclement weather has played havoc with the construction, and earlier this week, the project’s operating company promised completion “in the coming months.” In late November, Dmitri Kozak, Russia’s deputy prime minister in charge of energy, said Nord Stream 2 would begin operation “in mid-2020.”Even with the effective 90-day grace period allowed by the U.S. sanctions, the last 168 kilometers of each of the two strings of pipe may not be laid by the time the punitive measures kick in. It’s unlikely that Allseas, the Swiss-based contractor now working on Nord Stream 2, will defy the U.S. restrictions if it’s not done in time. Then, Gazprom will need to use the only pipe-laying vessel it owns, the Academician Chersky, to finish the job — a slow and iffy scenario, even if Russian Foreign Minister Sergey Lavrov says Nord Stream 2 won’t be halted. Congress could have been much harsher with its sanctions, though. It could have hit Nord Stream 2’s financial investors, all major European energy companies: Engie SA, Uniper SE, OMV AG, Wintershall Dea GmbH and Royal Dutch Shell Plc. It could have sanctioned Russian debt. It could have made it impossible to import equipment for the construction of Russian pipelines and do repairs and maintenance on them. All of these measures have been considered at various times, but struck down in order to avoid a major confrontation with the European Union and an upheaval in financial markets.As things stand, the punitive measures have the appearance of a vindictive gesture, a nuisance move that won’t change what comes next. Russian President Vladimir Putin’s grand plan of supplying gas both to Europe bypassing Ukraine and to China through the just-opened Power of Siberia pipeline can no longer be scuppered. The likely Nord Stream 2 delay may even be beneficial for Russia, in a way. Competition from Middle Eastern and U.S. liquefied natural gas and warm weather have driven down the price of Russian pipeline gas in Europe. In the three months through September, the average gas price, $169.8 per 1,000 cubic meters, was 18% lower than in the preceding three months and 32% lower than a year before. The last time Gazprom faced such prices was in 2004. Increasing supplies in such a market situation would send prices tumbling even further.No matter how carefully the U.S. sanctions are crafted to spare European allies, Germany is still irritated. On Thursday, German Foreign Minister Heiko Maas tweeted in response to the U.S. measures that “the European energy policy will be decided in Europe, not in the U.S. We fully reject external interference and extraterritorial sanctions.” Theoretically, the European Union could even retaliate by raising duties on American LNG.But the U.S. sanctions, belated, weak and irritating to the German government as they are, still aren’t completely pointless. Ukrainian President Volodymyr Zelenskiy’s office thanked U.S. Congress for them on Thursday, and while Ukraine routinely thanks Western governments for sanctioning Russia, this time there’s a specific reason for the gratitude. Ukraine and Russia are locked in a dispute over the future of Russian gas supplies through Ukraine’s pipeline system. The current contract runs out at the end of the year, and Ukraine wants a long-term agreement to replace it while Russia doesn’t want to commit itself. The possibility of a protracted delay to Nord Stream 2 strengthens the Ukrainian position because it makes Russia nervous, and time is running out for the EU-brokered negotiations if supplies of Russian gas to Europe are to continue without interruption. To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Tobin Harshaw at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Saudi Aramco stock rose 4.6% on Thursday, with its valuation climbing above $2 trillion—the first time any company has hit that mark.
WASHINGTON/VIENNA, Dec 12 (Reuters) - Underscoring U.S. lawmakers' continuing unhappiness with Russia, a Senate committee on Wednesday advanced legislation seeking to hamper Russian energy pipelines and boosting NATO but delayed voting on a measure nicknamed the "sanctions bill from hell" that would punish Moscow for meddling in the 2016 U.S. election. The Senate Foreign Relations Committee approved four energy bills, including the "Energy Security Cooperation with Allied Partners in Europe Act of 2019," which opposes Russia's Nord Stream 2 pipeline, encourages NATO countries not to buy Russian gas and expedites U.S. natural gas exports.
(Bloomberg Opinion) -- Along with never invading Russia or getting into a Twitter argument, we can add another golden rule — this one specifically for U.S. oil majors: Never buy a shale-gas business.Chevron Corp.’s $10-11 billion impairment, announced late Tuesday, relates mostly to the Appalachian gas assets it picked up in 2011’s $4.9 billion acquisition of Atlas Energy Inc. Back then, the Permian basin was not a regular topic on the business channels, nor was it a central pillar of Chevron’s spending plans. But now it is, and simultaneously plowing billions into a Permian oil business that spits out gas essentially for free while running a dry-gas business in the Marcellus shale is like flooring it with the parking brake on.Chevron joins the ranks of Exxon Mobil Corp. — which paid $35 billion for XTO Energy Inc. less than a year before the Atlas deal and has been haunted by it ever since — and ConocoPhillips, which bought Rockies gas producer Burlington Resources Inc. way back in 2006 for $36 billion and then wrote most of that off in 2008.But there is far more to this than just mistimed forays into the graveyard of optimism that is the U.S. natural gas market — and not just for Chevron.Big Oil just had a forgettable earnings season. Chevron announced cost overruns on the giant Tengiz expansion project in Kazakhstan. Exxon continued borrowing to cover its dividend. Across the pond, BP Plc and Royal Dutch Shell Plc flubbed resetting expectations on dividends and buybacks. What ties all of these together are weak returns on capital. Chevron’s problems in Kazakhstan are echoed in its impairment of another asset, the Big Foot field in the Gulf of Mexico. This is another mega-project that went awry and, in an era when producers can no longer count on an oil upswing to save the economics, is found wanting. Chevron is also ditching the Kitimat LNG project in Canada that it bought into in 2013.All this is a particularly sore spot for Chevron given its problems with Australian liquefied natural gas mega-projects earlier this decade. CEO Mike Wirth’s decision to clear the decks seems intended in part to signal that, unlike the experience of his predecessor with Australian LNG development, he will drop big assets that don’t make the cut financially.Discovering, financing and developing mega-projects is why the supermajors were created at the end of the 1990s. Today, when investors are interested at all, they’re leery of capital outlays, aware the outlook for oil and gas markets is challenged in fundamental ways. So tying up money in big, risky, multi-year ventures is a good way to crush your stock price.Wirth isn’t abandoning conventional development; Big Foot aside, the Gulf Of Mexico has several new projects in the pipeline, for example. But to offset the drag on returns from the extra spending at Tengiz, he must streamline the rest of the portfolio. This is the story of the sector writ large. “Too much capital is chasing too few opportunities,” as Doug Terreson of Evercore ISI puts it. Conoco, which remade itself radically after the Burlington debacle, set the tone with its recent analyst day, emphasizing the need to get the industry’s long-standing spending habits under control and focus on returns to win back investors who are free to put their money into other sectors. Chevron’s write-offs and shareholder payouts (38% of cash from operations over the past 12 months) are of a piece with this. While the company has laid out guidance for production to grow by 3% to 4% a year, that is very much subject to the returns on offer. Capital intensity — as in, shrinking it — is what counts.Chevron’s move throws the spotlight especially on big rival Exxon. While Exxon has taken some impairment against its U.S. gas assets, that represented a small fraction of the XTO purchase. Exxon also sticks out right now for its giant capex budget (bigger than Chevron’s by more than half), leaving no room for buybacks or even to fully cover its dividend.In the first decade of the supermajors, when peak oil supply was a thing, big projects with big budgets to match were something to boast about. As the second decade draws to an end, only the leanest operators will survive. Chevron won’t be the last oil major to rip off the band-aid, just as we haven’t yet seen the full extent of the inevitable restructurings and consolidation among the smaller E&P companies. On this front, there’s another golden rule: Better to get it done sooner rather than later. To contact the author of this story: Liam Denning at email@example.comTo contact the editor responsible for this story: Mark Gongloff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Saudi Aramco’s initial public offering is set to begin trading Wednesday, and expect the financial media industrial complex to go into overdrive.
2019 has been a tough year for oil companies, but some of the oil majors have fared surprisingly well due to their economies of scale advantage and low breakeven prices per barrel
M&C Saatchi stock plunged on Wednesday after the world’s largest independent ad agency issued a profit warning and revealed its accounting scandal would have a greater impact.
(Bloomberg) -- The European Union is gearing up for the world’s most ambitious push against climate change with a radical overhaul of its economy.At a summit in Brussels next week, EU leaders will commit to cutting net greenhouse-gas emissions to zero by 2050, according to a draft of their joint statement for the Dec. 12-13 meeting. To meet this target, the EU will promise more green investment and adjust all of its policy making accordingly.“If our common goal is to be a climate-neutral continent in 2050, we have to act now,” Ursula von der Leyen, president of the European Commission, told a United Nations climate conference on Monday. “It’s a generational transition we have to go through.”The commission, the EU’s regulatory arm, will have the job of drafting the rules that would transform the European economy once national leaders have signed off on the climate goals for 2050. The wording of the first draft summit communique, which may still change, reflects an initial set of ideas to be floated by the commission on the eve of the leaders’ gathering.The EU plan, set to be approved as the high-profile United Nations summit in Madrid winds up, would put the bloc ahead of other major emitters. Countries including China, India and Japan have yet to translate voluntary pledges under the 2015 Paris climate accord into binding national measures. U.S. President Donald Trump has said he’ll pull the U.S. out of the Paris agreement.In a pitch of her Green Deal to member states and the European Parliament on Dec. 11, von der Leyen is set to promise a set of measures to reach the net-zero emissions target, affecting sectors from agriculture to energy production. It will include a thorough analysis on how to toughen the current 40% goal to reduce emissions by 2030 to 50% or even 55%, according to an EU document obtained by Bloomberg News.Make It IrreversibleIn the next step, the commission will propose an EU law in March that would “make the transition to climate neutrality irreversible,” von der Leyen told the UN meeting. She said the measure will include “a farm-to-fork strategy and a biodiversity strategy” and will extend the scope of emissions trading.The EU Emissions Trading System is the world’s largest cap-and-trade market for greenhouse gases. It imposes pollution caps on around 12,000 facilities in sectors from refining to cement production, including Royal Dutch Shell Plc and BASF SE. Von der Leyen eyes the inclusion of road transport into the market and cutting the number of free emission permits for airlines.Some of the transportation industry’s biggest polluters have already stepped up efforts to reduce their environmental impact. In June, France’s Airbus SE, its U.S. rival Boeing Co. and other aviation companies pledged to reduce net CO2 emissions by half in 2050 compared with 2005 levels. EasyJet Plc, the U.K.-based discount airline, has promised to offset all of its carbon emissions by planting trees and supporting solar-energy projects, while Air France will take similar steps on its domestic routes.Germany’s Volkswagen AG, the world’s largest automaker, aims to become CO2 neutral by 2050, while Daimler AG plans to reach that target for its Mercedes-Benz luxury car lineup by 2039.To ensure that coal-reliant Poland doesn’t veto the climate goals next week, EU leaders will pledge an “enabling framework” that will include financial support, according to the document, dated Dec. 2. The commission has estimated that additional investment on energy and infrastructure of as much as 290 billion euros a year may be required after 2030 to meet the targets.The EU leaders will also debate the bloc’s next long-term budget next week. The current proposal would commit at least $300 billion in public funds for climate initiatives, or at least a quarter of the bloc’s entire budget for the period between 2021 and 2027.(Updates with details on draft sumit communique from fourth paragraph.)\--With assistance from Ania Nussbaum, Siddharth Philip and Christoph Rauwald.To contact the reporters on this story: Ewa Krukowska in Brussels at email@example.com;Nikos Chrysoloras in Brussels at firstname.lastname@example.orgTo contact the editors responsible for this story: Chad Thomas at email@example.com, Chris ReiterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Since 1980, the year Saudi Aramco was fully nationalized, the world’s largest oil producer has pumped about 116 billion barrels of crude oil from giant fields below the kingdom’s desert and the waters of the Persian Gulf.At today’s rate of consumption that crude would keep the world going for more than three years without using a single drop from any other oil-producing country. Put it through a refinery and you’d get enough gasoline to fill the tanks of more than 70 billion Chevy Suburban SUVs.And then there’s the carbon. All that oil has released more than 30 billion tons of carbon dioxide into the atmosphere in the last four decades, more than double China’s annual emissions. An analysis published in the Guardian newspaper last month reckoned Aramco’s oil was responsible for more emissions than any other single company.On one level that’s not surprising -- the modern global economy runs on petroleum and Aramco has been the prime supplier. But as Aramco makes the transition to becoming a publicly listed company, environmental concerns are one reason global investors have proved reluctant to embrace the world’s largest oil producer.Exxon Mobil Corp., Royal Dutch Shell Plc and other large oil and gas producers are already being pressed by a cohort of fund managers moving environmental, social and governance concerns up the agenda. Before Saudi Arabia decided to concentrate the IPO on local investors, one of the world’s largest sovereign wealth funds, Singapore’s Temasek, had decided to pass on Aramco because of environmental concerns.Big Oil is already under pressure “due to excessive carbon emissions, environmental footprint, social and community disruption, corruption exposure, health and safety and the now ubiquitous ‘stranded asset risk,”’ said Oswald Clint, an analyst at Sanford C. Bernstein Ltd. “Clearly then, the undisputed No.1 oil producer globally, Saudi Aramco, will come under a lot of scrutiny from investors as it embarks upon the public chapter of its life.”But Aramco is convinced it has a good story to tell on emissions. It goes like this: as the energy transition freezes and then shrinks demand for oil the complex, expensive, high-carbon supply sources like the Canadian oil sands will be increasingly abandoned. At the end of the story, only fields that are profitable in a world with strict emissions laws and depressed prices will remain, and from there this world will draw its last drop of oil.In Aramco’s 658-page IPO prospectus, the company explains why it possesses that last drop. There’s a table showing drilling a ton of Saudi oil takes half the energy of producing a barrel in the U.S. It shows that last year its lifting costs, expenses associated with bringing crude to market, were far lower than at each of the five oil majors -- Exxon, Shell, BP Plc, Chevron Corp. and Total SA -- even after those competitors worked vigorously for years to eliminate bloat.Aramco “is uniquely positioned as the lowest cost producer globally,” according to the prospectus. That’s “due to the unique nature of the kingdom’s geological formations, favorable onshore and shallow water offshore environments in which the company’s reservoirs are located.”An analysis from the influential consultant Carbon Tracker backed that up, saying the company was probably going to be “one of the last oil producers standing” in a carbon-constrained future.Mixed ObjectivesBut it isn’t likely to be that simple.While each individual barrel of Aramco oil was produced at a competitively low volume of CO2, much of the company’s value is derived from the sheer number of barrels at its disposal. The company has five times the amount of proved liquids reserves than the five largest oil majors combined, according to the Aramco prospectus.It has so much crude that even in a case where Saudi Aramco is the last oil company on earth, it still can’t produce all its barrels in a world that limits global warming to less than 2 degrees Celsius, according to an analysis from Rob Barnett at Bloomberg Intelligence.Under that scenario, a good chunk of Aramco’s reserves -- set to last more than 50 years -- may well end up as stranded assets.Governance is also likely to be a concern for potential investors. Just 1.5% of Aramco shares will be listed, leaving the Saudi state in a totally dominant position. Aramco will remain the main source of revenue for the kingdom, already running a larget fiscal deficit.“Governance issues will be a concern for investors,” analysts at Jefferies wrote in a research note. “The kingdom controls the board, is the resource owner and dictates production objectives.”Saudi Aramco has implemented some programs to cut its net carbon footprint, such as pledging to plant 1 million trees by 2025. It also is a founding member of the Oil and Gas Climate Initiative, which funds carbon-reduction technology and has made pledges to cut flaring. However, its oil major competitors have been listening to environmental complaints for decades also do that, and have gone further.An analysis from Bernstein showed the full-cycle emissions of Exxon, Shell and BP have trended downwards since about 2000. They are expected to keep falling as they implement measures suggested to them by eco-conscious shareholders, the report showed. Aramco’s full-cycle emissions have meanwhile increased sharply, reaching about double the volume of the three largest oil majors combined in 2015.Other oil companies are starting to take more radical action as pressure from governments, investors and customers to tackle the climate crisis builds. On Monday, Spain’s Repsol decided to promise zero net carbon emissions by 2050, while writing down the value of the business to reflect lower long-term oil prices Ben van Beurden, chief executive officer of Shell, said in an interview at the sidelines of the Oil & Money Conference in London in October that if he had any advice for Aramco at its IPO, it’s to learn to work with the oil industry’s climate critics. After all, they aren’t going anywhere.“When you get out in the market, you will get a lot of advice, a lot of conflicting advice, a lot of opinions and everything else,” van Beurden said. I think the IPO “is the opportunity for Aramco to plug into much more of the opinions of the world. To have their thinking shaped by that as well, rather than by events in the kingdom.”To contact the reporters on this story: Will Kennedy in London at firstname.lastname@example.org;Kelly Gilblom in London at email@example.comTo contact the editors responsible for this story: Will Kennedy at firstname.lastname@example.org, Rakteem KatakeyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Oil prices fell on Wednesday and Thursday after Trump backed Hong Kong protesters and Saudi Arabia suggested that OPEC would refuse to deepen production cuts
The bulk of the money appears to be coming from inside the country, with 4.9 million people in Saudi Arabia registering to buy shares.
Four cheap energy stocks for investors to consider, on the expectation that the increasingly unpopular sector will emerge from a decadelong slump. Plus: a bet on three drugs formerly in Celgene’s pipeline.
(Bloomberg) -- Fires were still burning at a Texas chemical plant after multiple explosions injured three workers and forced residents of Port Neches to evacuate.As of about 6 a.m. local time Thursday, the fire was still burning and the evacuation order remains in place, an officer at Port Neches police department said by phone.The first blast at TPC Group Inc.’s facility on Wednesday morning occurred in the site’s south processing unit at a tank with finished butadiene, the company said on its website. A second explosion about 12 hours later sent flames and debris high into the air. Jefferson County Judge Jeff Branick declared a state of disaster.“It is not clear at this time for how long the plant will be shut down,” TPC Group Inc. said on its website on Wednesday, adding that affected products included both raw materials and processed butadiene and raffinate. The facility about 100 miles (160 kilometers) east of Houston produces more than 16% of North America’s butadiene, and 12% of gasoline additive methyl tert-butyl ether, or MTBE, according to data provider ICIS. Butadiene is used to make synthetic rubber that is used for tires and automobile hoses, according to TPC.Bonds in closely held TPC, which is headquartered in Houston, fell as much as 8% on the news, making them the worst performer among junk-rated securities.The blasts at Port Neches follow a string of similar accidents in Texas this year. An explosion at a chemical plant northeast of Houston in March left one person dead, just two weeks after a blaze at an oil storage facility caused thousands of gallons of petrochemicals to flow into Houston’s shipping channel. Exxon Mobil Corp.’s suburban Houston refining and chemicals complex erupted in flames in July.The Jefferson County evacuation order issued late on Wednesday covered a radius of 4 miles that included parts of Port Neches, Groves, Nederland and Port Arthur.“I don’t think the focus is on putting the fire out, but letting the materials in there burn themselves out and keeping the surrounding tanks cooled with the water being sprayed,” Judge Branick said at a press conference.The Coast Guard said earlier that traffic was moving with restrictions on the Sabine-Neches channel, which links refineries and terminals in Beaumont and Port Arthur with the Gulf of Mexico.TPC said the initial blast injured two employees and one contractor. All three have since been treated and released from medical facilities, Troy Monk, director of health, safety and security at TPC, said at a press conference Wednesday.“You don’t want to be downwind of this,” Monk said. He couldn’t say when the fires would be extinguished, saying the main goal was “fire suppression.”Total SA’s Port Arthur refinery hasn’t been affected by the chemical plant fire, a company spokeswoman said in an email. BASF SE’s steam cracker in Port Arthur and Exxon’s Beaumont refinery also weren’t affected, according to representatives for the companies.Royal Dutch Shell Plc shut the Nederland station on its Zydeco oil pipeline, which pumps crude oil from the Houston area to refineries in Louisiana, a company spokesman said by email.TPC received 11 written notices of emissions violations from September 2014 to August 2019, according to Texas Commission on Environmental Quality records. Three of those were this year and were classified as “moderate” violations. The company also received several high-priority violation notices from the U.S. Environmental Protection Agency.TPC was taken private in a $706 million deal in 2012 by private equity firms First Reserve Corp. and SK Capital Partners, which staved off a rival bid from fuel additives maker Innospec Inc. that was backed by Blackstone Group. The company, formerly known as Texas Petrochemicals Inc., competes with LyondellBasell Industries NV in the butadiene market and is run by former Lyondell senior executive Ed Dineen.“Our hearts go out to them as well,” Port Neches Mayor Glenn Johnson said of TPC at a press conference Wednesday. “We appreciate TPC,” he said twice.Spot butadiene prices in the Gulf region are down 43% this year to 26 cents per pound, according to data from Polymerupdate.com. The decline is due to weak tire demand caused by the slump in global car sales, analysts at Tudor, Pickering, Holt & Co. said in a note Wednesday. Lyondell, which also makes butadiene, may benefit if a significant outage at the TPC plant leads to an increase in prices, the analysts said.Port Neches is a city of about 13,000, halfway between the refining centers of Beaumont and Port Arthur, Texas. Located on the Neches River, the city has long been associated with oil refining and petrochemicals.(Updates with police comment on status of fire in second paragraph, details on location of blast, affected products in third and fourth paragraphs. An earlier version of the story corrected the name of the company.)\--With assistance from Mike Jeffers, Adam Cataldo, Stephen Cunningham, Sheela Tobben, Kriti Gupta, Dan Murtaugh, Bill Lehane and Fred Pals.To contact the reporters on this story: Rachel Adams-Heard in Houston at email@example.com;Catherine Ngai in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Carlos Caminada, John DeaneFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A group led by Japan's Mitsubishi Corp will buy Eneco in a deal valuing the Dutch energy firm at 4.1 billion euros ($4.52 billion), Eneco said on Monday, beating off rival bids from Shell and private equity firm KKR. Eneco, a company owned by 44 Dutch municipalities and with a strong focus on renewable energy, said it had been swayed by Mitsubishi's plans to allow the company to continue its strategy and retain its corporate identity. The deal, backed by Eneco's boards and a committee representing shareholders, must still be approved early next year by the Dutch company's municipal investors.
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial […]
Oil & gas companies with a diversified portfolio and a good dividend continue to be the backbone of many investment portfolio, but which are the best?
(Bloomberg Opinion) -- Britain’s opposition Labour Party is turning its sights on the country’s aging fossil fuel industry and raising the specter of a windfall tax. The oil and gas companies working in Britain’s North Sea are a soft target and taxing them more might be justified. But the real challenge for Labour or anyone else is to identify the U.K. industry’s role in the transition to cleaner forms of energy and the fiscal incentives that would deliver that.The North Sea is a collection of mature, declining fields. While the London-listed oil majors BP Plc and Royal Dutch Shell Plc are still there, these operations make a relatively small contribution to their global profits. U.S. oil giants have a very minor presence. Big Oil’s preference is to go where the economics are more favorable — for example in U.S. shale.The U.K.’s oil assets have nevertheless proved attractive for closely-held operators with specialist skills in extending the life of old fields. The emergence of this sector has brought investment that probably wouldn’t have been forthcoming from the fields’ former owners; and it’s kept the local industry and its workers going longer than might have otherwise been the case.That spending has been encouraged by a looser tax regime, which has mitigated the deteriorating attractions of the assets. In 2011, the U.K. slapped a windfall tax on the North Sea producers, only to cut taxes again a few years later when the industry was grappling with a sudden fall in oil prices. As things stand, local producers pay more corporation tax than the standard U.K. rate, plus a supplementary levy.Labour’s manifesto, published on Thursday, says it seeks to tax those companies that “knowingly damaged our climate.” At the same time, it promises a strategy that safeguards jobs. But it’s not clear whether this policy means a retrospective tax on the companies that enjoyed higher cash flows from the North Sea in the past — the party is preoccupied by historic profits that it believes are under-taxed — while going soft on the new industry now emerging.The party’s aim is to create a fund that enables the industry’s workforce to reapply their skills and experience to developing green technologies. That’s a laudable goal but is easier said than done.There are some specific environmental issues facing the North Sea sector. The infrastructure that crisscrosses the freezing waters is old and therefore its carbon intensity — the emissions generated in the extraction activity itself — is probably higher than in fields developed more recently. Compounding this, smaller players lack the scale economies of the oil majors that help fund investment in more energy-efficient operations.There are no simple answers. Anything perceived as retrospective taxation would come at the expense of making the U.K. an unpredictable place to invest, and that could cost more than it generates by deterring investment from all sources.One place to start would be to incentivize capital investments that reduce the carbon footprint of these aged operations, such as improved carbon capture technology. If the ambition is to raise revenue to build a new clean energy industry in Aberdeen, a progressive tax tied to the oil price might achieve that with fewer side effects. The risk is that arbitrary changes force U.K. households and companies that rely on fossil fuels, and are trying to cut their consumption, to purchase them from overseas sources over whose operations Britain has no say whatsoever.To contact the author of this story: Chris Hughes at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
U.S. oil services company McDermott International said on Thursday that its participation in a huge petrochemical project in Russia, announced this week, was in full compliance with the law and did not breach international sanctions against Moscow. Royal Dutch Shell pulled out of the same Baltic Coast project in April, saying Russian gas giant Gazprom had changed its final concept for the project which initially had been designed to produce only liquefied natural gas.
Given its tremendous oil and gas reserves, Iraq could become a mayor petrochemicals player, but corruption and competition and geopolitical instability have proven to be major stumbling blocks