An international arbitration panel awarded Exxon Mobil about $908m in a verdict over oil assets nationalised by Venezuelan President Hugo Chávez in 2007, the WSJ reports, far lower than the $7bn Exxon was seeking in restitution. Analysts said the International Chamber of Commerce verdict appeared to be a victory for the Chávez government. The BBC reports Pdvsa, Venezuela’s national oil company, said it would actually pay much less than the $908m because of debts owed by Exxon. PDVSA said Exxon had previously used international courts to freeze $300m in Venezuela’s US accounts, and added that Exxon owed $191m relating to the financing of an oil project in Venezuela, as well as $160m that the arbitration tribunal said was due. Exxon said the ICC award gave the company “$907.6m of real financial benefit in the form of debt relief and cash”.
Petronas is in talks with several oil majors including Shell and Exxon Mobil to develop petrochemical plants within its $20bn refinery complex in southern Malaysia, Reuters reports, citing two sources with direct knowledge of the matter. Malaysia’s national oil company is also talking to Japanese firms Itochu and Mitsubishi as well as Dow Chemical as it seeks to tap surging Asian demand and diversify its earnings, the sources said. Petronas is expected to make a decision on the partnerships by mid-2012, which signals it is quickly moving beyond the feasibility stage of the project. “Petronas is getting a lot of interest for the joint venture undertakings,” said one source, who declined to be identified as discussions are ongoing.
It’s taken more than a day and a half but Gulf Keystone Petroleum (GKP) has finally responded to speculation that Exxon Mobil was considering a £7bn, or 800p a share, cash offer.
And guess what, the Kurdish explorer is not in takeover talks but it remains committed to creating value for shareholders blah, blah, blah, blah…. Read more
According to the Independent on Sunday, Exxon Mobil is contemplating a £7bn ($10.9bn) takeover of Britain’s Gulf Keystone, which has discovered large reserves in Kurdish areas of Iraq. Spokesmen for both companies declined to comment. While Exxon recently made its own move into the region, the deal it struck with the local government angered the central government in Baghdad, that declared that any such deals were illegal.
Breaking pre-market news on Monday,
- Ocado warns on its measure of profits; sees full EBITDA between £27.5m to £28.5; analysts expecting £34.3m — statement. Read more
Apple briefly passed ExxonMobil to become the most valuable company in the world by market capitalisation on Tuesday, 14 years after a brush with bankruptcy, the FT reports. Apple sank back below the oil group before the close of New York trading on Tuesday but if it continues its upward trajectory on Wednesday, it could end Exxon’s six-year dominance. It is not the first time a technology company has occupied the pre-eminent position in investors’ eyes; Microsoft and Cisco Systems have both held the crown before.
Exxon Mobil has announced the discovery of at least 700 million barrels of oil in the Hadrian field under the Gulf of Mexico, says Bloomberg. Work on the field had been delayed following the US moratorium on deepwater drilling after BP’s Macondo spill in the region, the FT notes, but Exxon has revealed the biggest Gulf of Mexico find since BP’s one billion-barrel Thunder Horse discovery twelve years ago. Exxon estimated more than 85 per cent of the resource was oil. BHP Billiton Petroleum and Royal Dutch Shell have also announced progress on drilling efforts in the area in recent days.
Indonesia’s national oil company has run into problems over a possible joint bid for ExxonMobil’s $3.5bn stake in an Angolan oil project after a dispute with Cnooc, the Chinese state-run oil company, reports the FT. The Indonesian and Chinese companies terminated their agreement after a dispute over terms of the renewal of separate oil concessions at West Madura in Indonesia, said people close to the matter. Indonesia’s Pertamina originally approached Cnooc to team up to acquire the Exxon stake, either to make a joint bid or to agree that the winning bidder of the two would bring in the other. Pertamina, which lacks the deep-sea exploration expertise needed for the Angolan project, is seeking another partner to help finance a purchase of the Exxon stake.
ExxonMobil, which has bet heavily on the US gas market through the $41bn purchase of XTO, depended on higher oil prices in the latest quarter as US natural gas prices continued to fall, reports the FT. The world’s largest private sector oil company by market capitalisation has a long-term forecast of robust growth in demand for gas, expecting it to provide an increasing share of power generation at the expense of coal. In the fourth quarter, however, its net profit was lifted by higher income from oil production and gas outside the US, and improving margins at its refineries and chemicals plants.
Yes, says Fred Lucas of JPMorgan, who notes that BP is trading on an implied reserve multiple that’s 30 per cent below its peers and equal to ExxonMobil’s long run finding and development costs:
Cnooc, China’s largest offshore oil producer, and Ghana National Petroleum have made a $5bn bid to buy Kosmos Energy’s assets in the West African country, including its stake in the Jubilee field, reports Bloomberg, citing people with knowledge of the matter. The all-cash, fully financed bid, the first from the Cnooc- Ghana National group, was received about two weeks ago, said the people. The offer tops an earlier, failed bid of more than $4bn from Exxon Mobil Corp. for the Kosmos assets
The price action in Falkland Oil & Gas on Monday morning, following news that it had found no hydrocarbons at its Toroa exploration well south of the Islas Malvinas:
As fantasy corporate finance goes, an Exxon bid for BP is not as far fetched as it sounds, reports FT Alphaville — and certainly more realistic than an approach from either PetroChina (political barriers) or Gazprom (political barriers, high debts, low stock market rating). The anti-trust issues would not be insurmountable. Any Exxon offer could separate BP’s downstream operations (refineries, pipelines, terminals and retail sites) and they could be left in the hands of BP shareholders. Read more
Anyone who has read Daniel Yergin’s historical review of the oil industry, The Prize, will know the important role Standard Oil — the company ExxonMobil is derived from — played in organising the oil market from 1870 onwards.
Although some might argue the term ‘monopolising’ is more apt. Read more
Otis Casey of Markit wrote this CDS report
Early trading saw the Markit iTraxx indices and stock markets higher as investors were heartened to see the last minute Abu Dhabi bailout of Dubai. The Markit iTraxx Europe index tightened by more than 2 bp to 79.49 bp. The Markit iTraxx HiVol was 2 bp tighter at 118.33 bp while the Markit iTraxx Crossover finished at 476.30 bp, tighter by 8 bp. Read more
And just when everyone thought M&A had crawled into a cave for the winter:
Exxon Mobil Corporation (NYSE: XOM) and XTO Energy Inc. announced today an all-stock transaction valued at $41 billion. The agreement, which is subject to XTO stockholder approval and regulatory clearance, will enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources.
Billionaire Warren Buffett’s Berkshire Hathaway on Monday revealed new investments in Nestle and Exxon Mobil and said it has nearly doubled its investment in Wal-Mart Stores, reports Reuters. It disclosed the investments, including the purchase of $144.7m worth of American depositary receipts of Nestle, in an SEC filing on US-listed equity holdings.
BP, Europe’s second-biggest oil company, may bid for Kosmos Energy’s stake in the Jubilee field off Ghana’s coast and has hired Goldman Sachs to advise it, reports Bloomberg. BP has held talks with Ghana National Petroleum Corp about a potential joint offer for Kosmos’s Ghanaian assets, although no decision has been made, said people familiar with the matter, noting that the move could threaten Exxon Mobil’s plan to purchase the Kosmos stake for at least $4bn.
Australia’s Chevron-led A$50bn ($42bn) Gorgon liquefied natural gas venture cleared a significant hurdle on Wednesday when Canberra gave environmental approval to the project, which will supply the fuel to China, India and Japan, reports Bloomberg. The ruling was one of the final obstacles before Chevron, Royal Dutch Shell and Exxon Mobil can proceed with plans to build the venture off Australia’s northwest coast. Already, however, China on Aug 18 signed a record LNG export deal under which PetroChina will pay Exxon $41bn over two decades for LNG from Gorgon.
Stephen Schork of the Schork Report sets out the case very succinctly on Friday:
Thus, while we were led to believe that demand for oil was rising in the second quarter, hence the justification for that 40 percent surge on the NYMEX, we now have the balance sheets from Exxon, Shell et al. that prove it was a lie. Read more
Production in Q1: Read more
With the prices of energy and other commodities hitting historic highs, companies around the world are making the hedging of their energy commodities exposures a top strategic priority.
That is generating a bonanza for the relative handful of investment banks and other dealers that have made a specialty of OTC commodity derivatives, according to new research from Greenwich Associates. Read more