Breakingviews

Exxon’s fracking gag makes Chesapeake look good

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Exxon Mobil’s reticence to come clean about fracking makes Chesapeake Energy look good. That’s a rare feat – and hardly one to brag about. The troubled gas firm is infamously opaque. But its openness on the risks of fracking puts larger rivals like Exxon Mobil and Chevron to shame. After another large minority vote from investors for more information on this controversial practice, Big Oil should follow its troubled cousin’s lead.

Private equity may owe Obama a debt of gratitude

By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Private equity firms say they find their best opportunities in the worst of times. This year’s U.S. presidential race gives them a chance to translate that idea to reputational management. Mitt Romney has weakly rebutted the president’s attacks on his Bain Capital tenure. Those who see the good side of leveraged buyouts are gradually speaking up. But the buyout barons themselves need to seize the moment.

Li Ka-shing opts for succession China-style

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Li Ka-shing is taking the Chinese approach to succession. After years of leaving investors guessing, Hong Kong’s richest man named his eldest son Victor as heir to his business empire. That should prevent a power scramble, and assures him a loyal follower who shares his values. The newcomer will even be surrounded by a coterie of long-time Li acolytes. It’s not dissimilar to the leadership transition happening in Beijing.

Europe’s banks must stop making muppets of savers

By Peter Thal Larsen and Fiona Maharg-Bravo

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

European banks are treating their retail customers like muppets. Lenders in Spain and elsewhere have flogged increasing volumes of their own bonds to unsophisticated retail customers. Such investments look ill-advised, at the very least. It also complicates government efforts to impose pain on creditors, rather than taxpayers.

EU probe shows hidden costs of China subsidies

By Wei Gu

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Subsidies are an old Chinese practice that is causing new headaches. The European Commission is poised to launch a big trade case against China over state credit given to telecoms equipment manufacturers, according to the Financial Times. Yet the companies in question, such as Huawei and ZTE, are competitive enough not to need such perks. Beijing’s support for national champions makes it easy for others to cry foul play.

Goldman renewable energy dash more than greenwash

By Christopher Swann
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Goldman Sachs is making a dash to invest in renewable energy projects. It says it will invest $40 billion of its own and clients’ money over a decade. The Wall Street firm isn’t above self-serving spin, but it’s also never far from the money. With solar and wind power nearing cost levels that are competitive with fossil fuels, clean energy could burnish Goldman’s bottom line as well as its green credentials.

Mike Lynch should try to buy Autonomy back

By Chris Hughes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Mike Lynch should try to buy Autonomy back. The software entrepreneur sealed a superb deal for shareholders when he sold the Cambridge-based firm to U.S. tech giant Hewlett Packard Co in October. But the marriage isn’t happy. Lynch was meant to be leading HP’s efforts to scale up the business. Instead, he’s leaving to do acquisitions of his own. It would make sense if Autonomy was on his list of targets.

Trafigura move tests Singapore’s fat-cat fatigue

By Wayne Arnold

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Trafigura’s move to Singapore could test Singapore’s fat-cat fatigue. The commodities trader is moving its HQ from Geneva to Singapore, where its CFO Pierre Lorinet will join Facebook founder Eduardo Saverin and a stream of bankers drawn by its low taxes and proximity to growing Asian markets. But a warm welcome may depend on new arrivals’ ability to create local jobs.

One reason for Facebook IPO mess: Zuck didn’t care

By Rob Cox
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Facebook has reminded investors of a simple lesson: Avoid companies whose bosses don’t care about you. From the get-go, Mark Zuckerberg, the social network’s not very sociable founder, made clear he had little interest in welcoming public shareholders. That indifference set a tone for his executives, venture capitalists and bankers that arguably contributed to the glaring flaws in Facebook’s initial public offering last week.

Did Chesapeake miss Enron lessons?

By Christopher Swann and Robert Cyran
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Chesapeake Energy, the embattled U.S. natural gas producer, seems to have missed some of the lessons of Enron’s demise. There have been no allegations of fraud. But the U.S. gas firm’s vast trading operation, fondness for complicated holdings and relationships, and corporate generosity are among the traits that, in hindsight, should have invited greater scrutiny of Enron’s edifice.

Chesapeake is a force in the U.S. gas market. It owns real assets, and it is the second-largest producer in the United States, accounting for about 9 percent of gross domestic gas supply according to a recent company presentation. It is the most active driller of new U.S. wells, and has substantial proven and unproven reserves. Meanwhile, joint-venture partners including Total of France and Norway’s Statoil attest to the substance of the projects they are involved in.