atans1

Posts Tagged ‘Energy’

An oil bull still?

In China, Energy on 23/11/2010 at 12:14 pm

Hedge funds cut bullish bets on oil by the most in almost three months amid speculation fallout from the Irish debt crisis and China’s efforts to curb inflation will slow economic growth, sapping demand for fuel.

The funds and other large speculators reduced so-called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report, released Nov. 19. It was the first drop in four weeks and the largest decline since the seven days ended Aug. 24.

Bloomberg story

And remember that if China uses its energy resources as efficiently as the West and Japan

http://atans1.wordpress.com/2010/09/28/whither-the-price-of-oil/

LNG Terminal: White elephant?

In Energy on 28/07/2010 at 6:08 am

S’pore’s rationale for its S$1.5bn LNG terminal is energy security (see backgrounder).

But an unstated aim is S’pore’s desire to ride on China’s growth. China needs a lot more energy, and gas is clean and relatively cheap. There will be opportunities for traders to make use of the terminal to sell LNG to China and other countries.

Err that was the plan. So the analysis  by Wood Mackenzie, an energy consultancy, that in China,  coal gasification, coal bed methane and in particular  shale gas are expected to supply more than 12bn cu ft per day by 2030,  cannot be welcomed here.

Wood Mackenzie says China will need only half as much more LNG from 2020 onwards than it will require in the next decade, cutting the country’s need for new tanker-delivered LNG to 8m tonnes a year from 2020, against 16m annually during the next decade. Read the rest of this entry »

Temasek: MM Lee being ignored? II

In Energy, Mining, Temasek on 17/05/2010 at 10:39 am

No not again. Temasek does another natural resources deal, it was reported last week.

Temasek and Hopu Investment Management, a Beijing-based firm, are to spend more than US$1bn to acquire a stake in New York-listed Chesapeake Energy; a US producer of natural gas from shale rock. They follow other foreign investors into the sector.

They  agreed to buy US$600m of convertible preferred stock and have an additional 30-day option to acquire a further US$500m of the stock, which they are “highly likely” to exercise alongside other investors. Bloomberg reports.

Cynics must be wrong to continue believing that the government (and MM lee in particular) controls the decision-making process at Temasek.  Temasek has the independence to do the wrong things. Bit surprising that Temasek’s PR machine does not highlight this. Are there subversives in the PR department that want to hide the truth of the relationship between Temasek and the government from the public. Friends of SDP and Dr Chee?

But still, one would have tot Temasek would listen to someone whom Time magazine rates as among the 100 most influential  persons in the world. Sigh, reminds me that somewhere in the bible there is something about a prophet being without honour in his own home.

http://atans1.wordpress.com/2010/04/05/temasek-mm-lee-being-ignored/

Let’s hope that the Fates do not punish the hubris of Temasek’s management. We lose.

BTW three mining deals you may not be aware of

It agreed to buy a peanutty US$50 million stake in the January share sale in Hong Kong by SouthGobi Energy Resources Ltd., a coal producer operating in Mongolia.

It provided funding for Niko Resources Ltd.’s $300 million acquisition of Black Gold Energy LLC. Temasek bought the C$310 million convertible bonds issued by Niko, the Calgary-based oil and natural-gas explorer said in a statement on Dec. 30.

And it bought 382,000 additional shares in  Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, in the first quarter, according to a recent filing with the SEC. Based on a closing price of US$70.24, that additional investment was worth about US$27 million, “peanuts”.

Update 18/5/10

According to a Reuters report, it has also recently bot C$500 million in Inmet Mining and a peanutty US$50 million in Platmin over the past two months.

*

A Contrarian Trade or Betting against SWFs?

In Energy, GIC, Temasek on 29/12/2009 at 5:43 am

Maybe it is time to buy the banks? Like John Paulson who is long BoA (Remember he correctly predicted the sub-prime credit crisis in 2007. That reaped him a US$3 billion profit.)

In a story from Fortune: “The next wave of sovereign wealth fund investments is likely to look very different from the flurry that occurred before the crisis. For one, the funds have drastically cut back on banking assets. Just 16% of the deals they made this year involved the financial sector, down from 48% in 2008, according to Barclays data. (Remember Temasek’s and GIC’s investments in Merrill Lynch (BoA), Barclays and UBS; and Temasek’s sales of BoA and Barclays.  GIC  only made wagga($) on Citi and it could get diluted there on its remaining holdings.)

And short or sell natural resources.

“Meanwhile, including China Development Bank, which received a capital boost from China Investment Corp., more than 50% of sovereign wealth funds’ investments were in the natural resources sector, up from a mere 8% the year before. Huey Evans points to the Chinese government’s investments in Rosneft and Petrobras (PZE), oil companies that agreed to send the country fuel in exchange for loans.”

When a controlling stake goes at a massive discount

In Energy, Investments on 16/12/2009 at 9:10 am

Glencore International, the world’s biggest commodity trader, has bought a 51% stake in  Chemoil Energy for US$233 million ($325 million) from the Chandran Family Trust.

It paid 35.52 US cents a share: 21.1% discount to the  closing price of 45 US cents, on Friday.

In late May this year, just before rumours of Glencore buying a stake appeared, Chemoil was trading at around the 30 US cents level. The rumours pushed it to as high as 56.5 US cents.

Moral of the story: buyer of a controlling block may not need to pay a premium to market. It all depends on its bargaining power vis-a-vis the seller. And whether there is another major shareholder willing to deal:  Itochu Corporation, a Japanese conglomerate, with a 37.5%  stake in Chemoil, was apparently contented with its stake.

Time to load up on oil-connected stocks? II

In Energy, Temasek on 09/12/2009 at 1:59 pm

A follow-up to comment on Temask selling its oil and gas E&P, Orchard, at the wrong time.  

“Oil prices have fallen for the fifth day in a row, weighed down by a stronger US dollar and amid concerns over demand.

‘US crude oil for January delivery fell $1.31 to settle at $72.62 a barrel.

‘In London, Brent crude fell $1.24, settling at $75.19.” — BBC Online report. $=US$

Remember as the price of oil falls, the more the financial pressure on smaller E&P outfits. The slowdown in bank lending doesn’t help their finances. They will be under pressure to sell stakes in their properties.

Time to load up on oil-connected stocks?

In Energy, Temasek on 09/12/2009 at 5:56 am

For those who believe that Temasek always gets things wrong (buying into and selling out of Barclays, Merrill Lynch/ BoA; buying into Shin, ABC Learning, Global Crossing), then Temasek’s sale of its oil and gas exploration and production company, Orchard, is a sign to load up on oil-related stocks.

It got its timing into E&P wrong, creating Orchard just as world oil prices started their climb towards a record US$147 in July last year. High oil prices  meant it was more expensive to buy into E&P assets then. But one would have thought that the fail in oil prices combined with the credit crisis should have meant opportunities for Orchard.  Smaller oil amd gas E&P companies needed funding.Apparently,  Orchard did nothing because it was sold to listed RH Petrogas for “peanuts”:  S$351,000-$371,000.

One can reasonably wonder if MM’s thoughts affected Orchard’s plans. MM Lee said (at about the same time as Orchard was created) GIC would not invest in mining ventures, because he didn’t understand mining. What is oil and gas E&P except a form of mining?

Follow

Get every new post delivered to your Inbox.

Join 211 other followers