Daily Archives: November 1, 2010

Fiona Harvey

Ali Naimi, the oil minister of Saudi Arabia, was in mischievous mood on Monday night, positing an oil price of $70 to $90 for the foreseeable future, and suggesting that oil consumers should be happy with such a settlement – because a price of more than $70 was needed to justify investments in renewable energy.

His remarks, which came in response to questions from the Financial Times at a dinner hosted by the Singapore International Energy Week, did not go down well with all sections of the audience – some were unhappy that the world’s biggest oil producer should suggest they be content with an oil price they felt was unnecessarily high.

Mr Naimi justified his $70 to $90 prediction, which he called a “comfortable zone” that should be welcomed by oil producers and consumers alike, by reference to renewable energy, which he suggested gave oil an “anchor” price. If the oil price were to fall below $70, then renewable energy would not be competitive, he said.

What’s your description of a successful IPO?

Is it one where three quarters of the stock ended up in the hands of retail investors at the bottom end of a lowered price range?

Is it one where the heavily indebted issuer was trying to raise at least €3bn but only got €2.6bn?

According to the lead bookrunner it is:

What’s also slightly presumptuous is that Enel Green Energy has yet to start trading. That happens on Thursday. Only then will it be possible to judge whether the biggest Italian IPO in a decade has been success.

On that front, traders reckon interest in the renewables spaces has been piqued by the flotation so perhaps EGE will go well.

And if we are measuring IPO’s on the Ocado template – ie they got it away – then Enel Green Energy has indeed been a success.

Related link:
Ocado’s grand ambitions fall back to earth – FT

What will the election of Dilma Rousseff, Lula’s anointed successor, as president of Brazil mean for the country’s energy sector?

The short answer is that she surely owes her electoral victory to a large number of voters wanting things to change as little as possible. Brazilians are quite happy with the way things are going in the country at the moment, and Dilma, as she is known, ran on a continuity platform and is unlikely to make any radical changes in such an important area.

But she is not Lula, and some developments in the sector were already underway. The long answer, then, is that to the extent we are likely to see any changes, it is that the country’s energy sector may become more central to a national political and developmental strategy.

Kiran Stacey

The FT published a special report on the energy industry today, taking a global look at some of the major issues facing the industry. Here are the links to the web versions of the pieces included:

- Power shifts reflect changed global reality

- Opec: Cartel’s power set to increase as stocks decline

- Big oil: Integrated majors need to reinvent themselves

- Deepwater drilling: BP’s disaster renews focus on inspections

- Climate change policy: Cancun offers slim hopes of progress

- Alternatives: Algae offer double benefit as biofuel and carbon capture

- US power inputs: Usurpers mount challenge to the ascendancy of King Coal

- Nuclear power: New dawn for a former sunset industry

- US policy: A nation in thrall to the power of oil

- Infrastructure: Clever way to cut usage and save money

- Shale gas extraction: Investors aim to profit from US experience

- Renewables: Design of subsidy systems is crucial to their success

- China: Beijing in the running to take crown for wind turbines

- Brazil: Jubilant mood as country taps fresh reserves

- Iraq: Upgrading proven reserves by over 20% is ‘big game changer’

FT Energy Source

- BG Group confirms liquid gas project – FT

- Hong Kong consortium buys British electricity assets – WSJ (£)

- Japan agrees Vietnam nuclear deal – FT

- Reliance’s profits improve on refining revenue – Argus

- India’s oil demand to jump 40% in ten years, says PM – Economic Times

- Saudi Aramco may raise crude prices to Asia – Bloomberg

- Obama environment agenda under threat from Republicans – The Guardian

- India’s rapid growth lures global investors – FT

- Ministers plan to safeguard gas supply – The Telegraph

- Exxon’s bet on natural gas – NY Times Green blog

- British companies examine BP crisis – The Times (£)

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