Daily Archives: March 30, 2009

Carola Hoyos

Thomas Friedman this week calls for a Dow Jones index that reflects Mother Nature’s wellbeing (or lack thereof). What he might in fact want to do is take a leaf from Gretchen Morgenson, who wishes more shareholders would follow the lead of those willing to smoke out Chesapeake Energy’s overpaid chief executive.

We all know Mother Nature is feeling poorly, so perhaps what she needs more urgently than Mr Friedman’s Dow index is more active investors. Come to think of it, what investors of companies listed on the Dow need is an index that better highlights – and shames into submission – grossly overpaid chief executives and the board members that allow them to get that way.

Ed Crooks

On Energy Source:

- Tony Blair talks about green stimulus packages

- Russian enter Hungary as OMV sells Mol stake

- The “long aftershock” for oil supplies

- Oil will get more sludgy

- Earth Hour observed

Elsewhere:

2008 profits for Sinopec, China’s biggest refiner, were down 47 per cent at about $4.4bn, but beat analysts’ expectations. The outlook for this year looks better, but depends on government decisions on regulated fuel prices (Bloomberg)

NY Times story on the costs of renewable energy is savaged once (Grist) and again (Daily Kos)

Ed Crooks

OMV, Austria’s oil and gas company, has at last accepted defeat in its long battle to win control of Mol of Hungary, selling its 21 per cent stake for about €1.4bn. The really striking feature of the deal is the price that Surgutneftegaz, the Russian buyer, is paying: over Ft19,200 per share, almost double the market price of about Ft9,900 last Friday. OMV had appeared to be sitting on a substantial loss, but it has emerged from its Hungarian adventure roughly breaking even.

So why is the minority stake stake in Mol worth so much?

Carola Hoyos

The long term inexorable march toward poorer quality crudes will be interrupted by better grades coming from expansions in Saudi Arabia and West Africa, but won’t save refiners the cost and bother of retooling their equipment to deal with the ever sludgier stuff coming from newer fields (and our ongoing thirst for petrol and diesel - the lighter half of the barrel). It’s a tough conclusion by Sanford Bernstein and will affect refiners already bracing themselves for the changes they forced on them by Washington’s green revolution. Best positioned are the majors and sophisticated refiners such as Valero. US refiners, who have been more fastidious about upgrading their kit, have the edge over their European counterparts. The Indians, however, are a step ahead with the giant Jamnagar complex.

Energy news from the FT:

- India looks to China to fill power deficit
Chinese companies building $7bn in equipment for India customers

- Telecom Plus boosted by word-of-mouth support
Offers cheap gas and electricity in addition to broadband

- Coal sector back with rich seam of apprenticeships
Companies recruiting to counter effects of ageing workforce

Energy news from elsewhere:

- US to host forum on climate change (WSJ)

- Obama administration to appoint nuclear waste commission (Platts)

- Shares of offshore oil drillers poised to rise (Barron’s)

- Nine years after bust, California restarts daily electricity auction (WSJ)

- Crude-oil rally is vulnerable as contango widens, Goldman says (Bloomberg)

- Ex-Vitol trader Serotta to start $100m oil hedge fund (Bloomberg)

- China oil refiners swung to profit in first 2 months (Bloomberg)

- China’s Shenhua Energy earmarks $4.37bn for 2009 capex (Reuters)

Energy Source is no longer updated but it remains open as an archive.

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