Kevin's Feed
Mar 22, 2013

Cypriot gas no fix for country’s funding gap

LONDON (Reuters) – Cyprus’ gas is worth less than $2 billion (1.3 billion pounds) based on reserves found so far and there may be too little to develop anyway, leaving plans to mortgage them against a $13 billion bailout unlikely to fly, Reuters research has found.

So far, an estimated 200 billion cubic metres (bcm) of natural gas worth $80 billion at current prices have been discovered in the Aphrodite gas field in Cypriot waters.

Mar 20, 2013
via Breakingviews

Elusive future gas riches can’t help Cyprus now

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By Kevin Allison

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

If there are any optimistic Cypriots left, it’s probably because of recent huge gas finds off the struggling Mediterranean island’s coast. But it’s too soon for Cyprus to put hard and credible numbers on its hoped-for resources boom. U.S. driller Noble Energy thinks it has found about 7 trillion cubic feet (tcf) of the fuel under deep water in Cyprus’ Aphrodite gas field.

Feb 22, 2013
via Breakingviews

Bumi debacle teaches some all too basic lessons

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By Kevin Allison and Quentin Webb

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

The debacle at Bumi teaches some lessons which really should not need to be learned. The story of Nat Rothschild’s London-listed cash-shell, turned into an Indonesian coal miner, has tarred everyone involved, given acquisition vehicles a bad name, and damaged the City of London’s reputation. Concrete policy changes may follow, and alleged financial skulduggery could yet produce more fallout. But most of the mess could have been avoided if Rothschild and his backers had followed what should be standard practices for risky investments.

Feb 21, 2013
via Breakingviews

Bumi shareholders should back incumbent board

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By Kevin Allison

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

(This view was originally published by Breakingviews on Feb. 13.)

Back the Bumi board. Both the competing plans to salvage value at the coal miner have serious flaws. But the incumbent management looks better positioned than dissident co-founder Nat Rothschild to achieve an all-important split with Indonesia’s Bakrie family. That split should be investors’ top priority.

Feb 20, 2013
via Breakingviews

Marius Kloppers will be hard act to follow at BHP

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By Kevin Allison

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

Marius Kloppers, BHP Billiton’s outgoing chief executive, mostly deserves his reputation as a savvy boss. Management discipline – along with great assets, a bull market, and not a little luck – underpinned strong shareholder returns during his tenure. Incoming boss Andrew Mackenzie will stick to the formula, but he’ll need more luck to do as well.

Jan 31, 2013
via Breakingviews

Shell shows the flip side of shale nirvana

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By Kevin Allison

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

Royal Dutch Shell’s latest results show there is a flip side to shale nirvana. The combination of vast new supplies and a continuing lack of export capacity have kept oil and gas prices down in North America. The cost advantage for the region’s manufacturers might excite the Davos set, but the much-hyped shale revolution also creates relative losers.

Jan 29, 2013
via Breakingviews

European carbon market doesn’t need a supply fix

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By Kevin Allison

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

Policymakers racing to prop up the European Union’s carbon market should focus on the long term instead. Proposals to boost record-low carbon prices show a confusion about what cap-and-trade systems such as the EU’s Emissions Trading Scheme can achieve. Even if the carbon price fell to zero, greenhouse gas emissions would stay within an agreed 2020 limit. To ensure the scheme’s future, authorities should focus on the cap, not juggle permit supplies.

Jan 24, 2013
via Breakingviews

Glencore Xstrata needs governance champ in chair

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By Kevin Allison

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

Independent shareholders should urge Glencore Xstrata to cast a wide net in its hunt for a new chairman. Ivan Glasenberg, chief executive of Glencore and the biggest individual shareholder in the combined group, stocked his board at Glencore with operational expertise. Glencore Xstrata needs a broader perspective.

Jan 22, 2013
via Breakingviews

Fog of Bumi’s battles may be just too tiresome

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By Kevin Allison

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

Bumi’s minority shareholders are ill-served by the open conflict raging between the coal miner’s board, its founder Nat Rothschild and Indonesia’s Bakrie clan. They deserve an adult debate about the merits of competing plans to unwind a tie-up with its Indonesian backers. They need clarity about the nature of alleged financial irregularities. They are getting a juvenile shouting match.

Jan 17, 2013
via Breakingviews

Rio’s snap succession makes bad news look worse

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By Kevin Allison

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

It was time for Tom Albanese to go. But the snap succession at Rio Tinto which dismissed its chief executive on Jan. 17 as it took a $14 billion writedown on the value of its coal and aluminium businesses, makes a bad situation look even worse. Although Albanese’s successor, Rio iron ore boss Sam Walsh, is experienced and capable, the decision to install a new CEO immediately looks rushed.