Korea National Oil Corp. (KNOC) on Friday made a hostile bid for the United Kingdom's Dana Petroleum PLC, marking the first time a state-owned Asian company has gone directly to shareholders.
The move underscores South Korea's determination to double its oil output by 2012 and increase its energy security. It also shows that South Korea will not be denied energy assets, despite being outbid by Chinese companies in several instances.
KNOC took the $2.9 billion (1.87 billion pound) bid to Dana's shareholders after the oil explorer rejected KNOC's previous offer of 1,800 pence a share offer. In a filing with the London Stock Exchange, KNOC said it had support from 48.62% of shareholders, putting the needed 50% approval target within close reach.
This China Province Will Become a Global Oil-and-Gas Market Powerhouse
Like everything else, the balance of power in the global energy market is shifting toward China, where a little-known province is perfectly situated to become a global oil-and-gas market powerhouse.
Nestled in the far northwest of China, Xinjiang is the country's largest province and the primary domestic source for oil and gas. It is sparsely populated and as big as Western Europe. The name, Xinjiang, literally means "New Frontier." And recent decisions in Beijing are going to give that translation even more meaning - transforming this province into a "new frontier" for the global energy sector.
To understand how to profit from this development, please read on...
Crude Oil Prices Tumble as IEA Warns Economic Woes Could Stunt Demand
Oil prices yesterday (Wednesday) fell below $80 a barrel after the International Energy Agency (IEA) warned that demand could be curtailed if global economic growth is weaker than expected.
The warning came even as the IEA, an energy adviser to 28 industrialized countries, slightly increased forecasts for global crude demand for this year and 2011.
However, those projections were based on revisions to historical oil-demand data and on forecasts issued by the International Monetary Fund (IMF) nearly four weeks ago. Since that time, economic news in the United has become gloomier.
The U.S. Federal Reserve said after its policy meeting on Tuesday that the pace of economic recovery had slowed in recent months and was expected to be "more modest in the near term" than previously thought.
Hot Stocks: TECO Energy Inc. (NYSE: TE) Is Turning Investors On to Profit
TECO Energy Inc. (NYSE: TE) over the past year has been one of the best performing stocks in my Strategic Advantage StrataGem portfolio.
The stock has jumped 7.75% in just the past month, is up more than 30% in the past year, and it pays a generous 4.7% annual dividend.
So here's what it is all about.
TECO, which is based in Tampa, provides electricity to 667,000 customers and natural gas to 330,000 individuals in west central Florida. It also operates a coal mining operation in Kentucky and a small utility in Guatemala.
Since 2003, TECO - formerly called Tampa Electric - has reshaped itself into a regulated utility from a diversified energy company. It sold $4 billion of assets and reinvested the proceeds in regulated utility projects with attractive returns. The regulated units, Tampa Electric and Peoples Gas, now generate 90% of TECO's profits. TECO's $3.52 billion market cap and $3.40 billion in annual sales make the company one of the smaller utilities in the United States.
Money Morning Mailbag: BP Stuck in Oil Spill Spotlight While Others Downplay Disasters
The BP PLC (NYSE ADR: BP) oil spill disaster has shone a spotlight on oil industry pollution. While BP takes the brunt of public anger, no oil company has escaped the wrath of critics who are eager to expose an industry they feel shortcuts safety standards for profit.
Comments from readers with first-hand industry experience continue to pour into Money Morning's Mailbag, sharing their thoughts on the oil industry's operations.
Hot Stocks: OGE Energy Corp. (NYSE: OGE) Is Electrifying Investors' Portfolios
Utilities have been red-hot in the past month, as subscribers to my private advisory service - The Strategic Advantage - have earned double-digit profits on power generators from Vermont to Arizona.
Let's take a look at one of my favorites now: OGE Energy Corp. (NYSE: OGE), the parent company of electric utility Oklahoma Gas and Electric Co. and natural gas pipeline operator Enogex LLC.
OGE exemplifies our summer theme: Low-risk asset growth, stable earnings and rising dividends. The stock has performed very well for us - it's up more than 11% this month. OGE also pays a 3.7% dividend.
We've talked a lot about utilities, but it is hard to overstate their importance. Businesses need electricity to run production lines, operate computer servers, manage inventory, and light buildings. A power outage that only lasts a few minutes can cost a business thousands of dollars, because machines need to be readjusted so that products can be correctly assembled.
Oklahoma Gas and Electric is the utility unit of OGE and provides electricity to nearly 800,000 customers in Oklahoma and western Arkansas. It is a sizeable utility with $3.14 billion in annual sales and a $3.83 billion market cap. OGE mainly generates electricity from natural gas because the utility receives excellent distribution rates from Enogex.
BP's Offshore Plans Spark Talk of Drilling Ban Among Concerned European Nations
BP PLC's (NYSE ADR: BP) plans to drill for oil and gas off the coast of Libya within weeks has caused nearby European countries like Italy to sound the alarm for a drilling ban until they ensure the safety of surrounding waters.
Italy's Environment Minister Stefania Prestigiacomo was the first European Union official to suggest a drilling ban to give nations around the Mediterranean Sea time to coordinate a drilling policy.
"A moratorium could be a right approach for potentially dangerous drilling...to give Europe time to define a new and specific strategy for the Mediterranean especially in light of the risk exposed by the Deepwater Horizon spill," Prestigiacomo wrote to the Financial Times.
BP has a rig in Libya's Gulf of Sirte, about 500 kilometers from Italian and Maltese territory. The first of five planned wells will be about 200 meters deeper than the Macondo well that spewed as much as 184 million gallons of oil into the Gulf of Mexico for almost three months.
Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth
While advanced economies are still facing high levels of unemployment, more than a billion people in emerging markets are experiencing advancing standards of living.
As these emerging economies - especially China and India -grow, there is a strong trend toward urbanization. People are leaving the countryside for the cities in droves in order to reap the promise of the global economy. This secular process alone places huge demands on the existing infrastructure.
This growth is also boosting manufacturing and energy needs. China has surpassed the United States in both car production and energy consumption. And India's Tata Motors Ltd. (NYSE ADR: TTM) launched the cheapest car in the world, the Nano, which costs roughly $2,500. The critically acclaimed vehicle's mass appeal and affordability is creating additional congestion on India's famously overcrowded streets. Adding more fuel to the global-demand fire, most emerging economies implemented a strong dose of infrastructure spending within their budgets as a result of the global financial crisis of 2008.
The result of all that infrastructure development, urbanization and increased consumer affluence is a myriad of new road, bridge and building construction, additional urban development, and stepped-up production of cars, home appliances and other consumer goods. All of these developments require two key ingredients to become reality: Steel and energy.
Money Morning Mailbag: Relief Wells Near Finish, But Oil Spill Blame Game Continues
While BP PLC (NYSE ADR: BP) closed in this week on finishing relief wells to permanently plug the oil spill, stormy weather threatened to delay the final steps as clean up crews were called in to shore.
BP capped the blown-out Macondo well last week and has been conducting pressure tests to ensure the cap's strength. A relief well is close to completion but work has been halted until the storm passes. All work could be stopped for 10 - 14 days if the area is evacuated.
While the leak may finally be close to plugged, the financial aftermath is far from over. Corporate entities and the U.S. government continue to point fingers at each other.
Energize Your Portfolio With These Four 'Smart-Grid' Technology Plays
Larry Fisher spends all his time lately designing new ways to conserve electricity.
As the research director of NextGen - the division of private, New York City-based ABI Research that tracks smart grids worldwide - Fisher has more and more on his plate these days. That's because the wave of new investment in this emerging sector is just beginning.
NextGen also serves as an incubator for brand-new approaches in electronics and smart-grid technology. Over the past several years, the groundwork for smart grids has emerged in a number of countries, Fisher says. For that reason, the rates of both investment and implementation are increasing.
In a brand new report, Fisher's research team estimates that we will spend some $45 billion worldwide between now and 2015 on smart-grid-related transmission-and-distribution (T&D) infrastructure, implementation of related components at the level of utility companies distributing the power to consumers, and smart meters. (These last ingredients allow you to measure usage and redistribute power on your own.)
When compared to the trillions spent on generation and transmission, $45 billion may seem like a pittance.
But it certainly does indicate that a change is approaching. And for certain companies that find themselves in the middle of this significant energy revolution, it's going to mean lots of profits.
Let's take a closer look...