Daily Archives: June 24, 2010

The set of small oil and gas advisory groups bought up by investment banks in recent years continue to do well for their owners.

BP’s hire of Standard Chartered to help sell $10-$20bn of upstream assets has much to do with Martin Lovegrove, the veteran oil and gas banker whose boutique, Harrison Lovegrove was purchased by StanChart in 2007.

New York-listed Jefferies’ buy out of Randall & Dewey has also been integral in making the bank one of the top dealmakers in the booming US unconventional gas market.

Jefferies last year advised XTO in its $31bn sale to Exxon, the largest deal in the sector since Chevron-Texaco. More recently Jefferies acted for East Resources when it sold $4.7bn of Marcellus shale assets to Royal Dutch Shell.

Elsewhere, Macquarie, the Australian bank, bought energy boutique Tristone for C$116m last year.

Now, Russian investment bank Renaissance Capital is getting in on the action.

RenCap has struck a partnership with banker Jeffrey Waterous to form a new advisory business focusing on oil and gas asset sales the Middle East, Africa and other emerging markets.

If Mr Waterous’s name sounds familiar, it is because he too established one of the leading oil and gas boutiques back in 1987, which was later bought by Canada’s Scotia Bank to become Scotia Waterous.

Since selling out Waterous – one of the first Western bankers to advise on sales to Chinese oil companies – has spent his time working on downstream and midstream transactions in the Middle East, adding further to his already sizable client list.

Based in Bahrain, the new business will be looking to feed asset hungry energy companies eager to do deals in emerging markets.

However, unlike the examples mentioned above, the RenCap outfit – to be named Renaissance JMW Energy – will remain independent from the wider bank, meaning the new entity will be more likely to retain its existing culture.

This, the bank will be hoping, will be a shrewder move than simply splurging cash on an established franchise, only to see its people – an advisory house’s main asset – dash for the exit.

At a time when demand for oil and gas assets shows little sign of fading,  it would be no surprise to see other banks follow RenCap’s lead.

Kate Mackenzie

Democratic representative Ed Markey has got some very good coverage from the Gulf oil disaster so far, with his successful demands for the subsea video feeds to be made publicly available, and the “walrus emergency plans” bombshell.

His latest move will fuel (or perhaps ultimately kill off) some of the more persistent rumours and fears about the subsea situation at the Gulf of Mexico oil spill.

Markey wants BP to provide information about the possibility of a rupture in the well casing.

This is a rumour that simply won’t go away and hasn’t, to our knowledge, been ruled out  — at least, not by incident commander Thad Allen.

Another target, listed in a lengthy letter to Tony Hayward, is the risks around the relief wells it is drilling to stop the gushing Macondo well, and whether they entail the same risks as the original well, due to their similarities.

Kate Mackenzie

China is talking up its efforts to reduce its energy intensity (the amount of energy used per unit of GDP) as it looks like it could miss its targets for the 2005 – 2010 period.

The big questions have always been; how serious is it, and how effective will those measures be?

Several commentators are sceptical, as we wrote in a recent post describing claims that China’s carbon (not energy) intensity efforts were not really efforts at all; just business as usual. This drew an interesting comment from NRDC’s David Cohen-Tanugi, who argues, among other things, that:

For a country like China that has already taken significant actions to reduce the growth of its energy demand and emissions, the difference between continuing existing policies and business as usual (i.e. doing nothing to address climate change) is considerable.

It’s a good point. But determining what’s a genuine energy reduction policy and what’s ‘business as usual’ can be complex, especially in an economy where government explicitly wants to move higher up the value chain anyway. Shifting this way tends to reduce energy intensity regardless.

So should we only “count” China’s energy-related policies, or its broader economic policies too?

It’s much more clouded by the fact that some stimulus measures introduced during the past few years have encouraged greater energy intensity (China’s economy, remember, is already fairly high on this scale.)

Kate Mackenzie

- Markey has more well questions

- Deep concerns over economy and energy

- A smart grid plan derailed by scepticism

- More renters: bad for energy efficiency

- Does GoM spill = higher food prices and more?

- How much oil will we need?

- Just like Apple. Except with cars

- Oil: the new tobacco

Kate Mackenzie

- Claiming weigh risks of BP fund - FT

- BP claimants offered fast route to payout - FT

- BP working to reinstall cap – NOLA.com

- Spain pressed over solar tariff cuts - FT

- Interior eyes more flexible moratorium - The Hill

- Czechs say Russian spies targeting energy sector - Reuters

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