Christopher's Feed
Jan 31, 2011
via Breakingviews

Big Oil’s big spending shouldn’t freak investors

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

Big Oil firms have become big spenders. Together, the top three U.S. giants say they plan capital spending of about $60 billion — well above the year of peak crude prices in 2008 — despite showing only tepid cash flow growth. At first blush, this looks like desperation, as Western oil groups increasingly struggle to replace crude reserves. But patient investors will find higher returns are on the way.

Jan 26, 2011
via Breakingviews

U.S. oil independence no longer a joke

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

America imports some 10 million barrels of crude oil daily. Presidents have paid lip service to reducing this dependence since the 1970s. But as drivers shun gas guzzlers and U.S. production rises, imports could be cut in half this decade. Oil self-sufficiency could even be within reach.

Jan 24, 2011
via Breakingviews

Big Oil could unlock big value by ditching dogma

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

Big Oil could unlock big value for shareholders. But to get there it needs to slaughter an industry sacred cow: the integration of the exploration and production business with refining and other activities. This model worked for decades but today accords a conglomerate discount to the likes of Exxon Mobil, Shell and BP. Splitting up, as smaller Marathon is doing, could add tens of billions of dollars to shareholders’ portfolios.

Jan 14, 2011
via Breakingviews

Washington is neglecting a natural choice in gas

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

NEW YORK — Natural gas may be Uncle Sam’s most ignored blessing. With resources now equivalent to Iran’s oil reserves, domestic shale gas offers a chance to meaningfully reduce the country’s dependence on foreign oil, cut the deficit and even reduce greenhouse emissions.

Dec 29, 2010
via Breakingviews

Oil bulls may have to pull in their horns

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

NEW YORK — Oil bulls are once again kicking up dust. The intensifying struggle to lift output, they say, will collide with the insatiable thirst of an expanding Asia to push oil above $100 a barrel. In fact, the cost of crude may be held down by a halving of demand growth as producers from Russia to Africa via Brazil ramp up supply.

Dec 20, 2010
via Breakingviews

N. America’s gas drilling frenzy won’t end in 2011

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

North America’s shale revolution has run out of control, with leases forcing firms to step up drilling even as gas prices slump. The riot should last through 2011, even though many wells are money-losers. All this should lead to a wave of consolidation and joint-venturing — like the deal Talisman Energy announced with Sasol on Monday — in the gas patch.

Dec 15, 2010
via Newsmaker

Behind the failure of the IMF

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

Along with hedge fund manager John Paulson, the International Monetary Fund was perhaps the biggest winner from the global financial crisis. By the start of 2007 the IMF appeared to have lost its role as the world’s lender to crisis-ridden countries. With no demand for its emergency loans, nobody was particularly interested in the fund’s opinions either. The assumption was that it would become little more than a glorified think tank.

Dec 13, 2010
via Breakingviews

Extraction technology drives rash of oil deals

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

NEW YORK — It’s tempting to use pricier oil to explain Monday’s trio of oil services industry deals, headlined by General Electric’s purchase of Wellstream Holdings for 800 million pounds. But the stronger underlying theme is rising interest in techniques for reaching oil that’s hard to get at. Specialists want new capabilities — and the majors want bigger partners.

Nov 23, 2010
via Breakingviews

BP’s PR sludge keeps flowing with new book

BP may have felt the public relations tide was turning in its favor. Probes into its Gulf of Mexico spill have so far unearthed no direct proof that a culture of corner-cutting at BP caused the disaster and investigators have even spread part of the blame to the firm’s contractors. But the reprieve may be cut short by writer Loren Steffy’s deeply critical history: “Drowning in Oil: BP and the Reckless Pursuit of Profit.”

Like the financial crisis, BP’s record-breaking oil spill is sure to spawn a shelf full of books. Steffy’s readable account has surfaced before the release of much important evidence relating to BP’s greatest mishap. Still, the author makes a convincing case that the Macondo blunder can be traced to a longstanding BP culture of neglecting safety.

Oct 28, 2010
via Breakingviews

Will Halliburton have to shoulder 15 percent of BP’s mess?

Halliburton has been dragged further into the BP mess. The oil contractor lost $3 billion of market value on charges by a presidential commission that it did a shoddy job cementing the rig that cracked and led to the disastrous leak. That suggests investors expect Halliburton to pay a big slice of BP’s $20 billion cleanup fund. It’s possible—but don’t count on it.

Well blowups are seldom the result of a single blunder. And BP’s epic Gulf of Mexico spill is certainly no exception. So it should come as no surprise there were problems with the cement job done by Halliburton. Soon after, BP was quick to parcel out responsibility. Any confirming evidence will help provide BP’s public relations with some cover. Equally, any indication of Halliburton error will spread the reputational damage.
Yet it is too early to say that Halliburton will suffer such a substantial financial hit. The letter from the panel’s lead investigator was less damning than some initial press reports indicated. Halliburton shared test results with BP suggesting its cement had “failed to meet industry standards.” Had Halliburton failed to disclose material details this would look far worse. BP also had time to react and rectify the situation since the finding came more than a month before the blowup.

    • About Christopher

      "I am a columnist at Thomson Reuters focusing on the energy industry and hedge funds. Prior to this I worked at Bloomberg and the Financial Times."
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