• Vattenfall makes DKr25bn Elsam bid

Sweden’s Vattenfall last week launched a DKr25bn ($4.4bn) bid for Elsam, the Danish power group, in an expansive move that could either scupper a planned merger with Denmark’s Dong or pitch a pair of state-owned utilities into a costly bidding war. Monday’s bid came a month after Elsam’s board agreed to a merger with Dong, the Danish state-owned oil and gas group the government has earmarked for partial privatisation. the plan to merge Elsam and Dong enjoys wide political support in Denmark, a sizeable group of Elsam’s shareholders – mostly provincial grid companies – have been unhappy that it could be years until they realise the full value of their holdings. Elsam’s shareholders will not vote on which offer to accept until 28th of January, but already on Monday there were signs Vattenfall’s bid had a fighting chance. Meanwhile, a news article later in the week has noted that the board of directors of Elsam have rejected the bid offer of Vattenfall. (Source: Financial Times)

• Carbon Emissions trading fires up

Europe’s first exchanges are finally gearing up for business. At least six so far have stepped forward with emissions trading platforms with possibly more to come, many of them potentially vying to lead a unified pan-European market. One of the six, Amsterdam based European Climate Exchange says trades in the European CO2 market could be worth about €1.7 millBn a year.  ECX’s estimate is based on the assumption that of 2.2 Bn allowances issued to Europe’s registered emitters such as power stations and industrial factories about 5 to 10 percent will be traded. A single allowance permitting one tonne of CO2 emissions was currently trading at € 8.50 before Christmas on the over the counter market but last week it has fallen to € 6.85 per tonne.  Over the counter trades are likely to retain at least half the volume even after exchanges get into full throttle.  Prices of emissions and prices of power was noted to be likelSy closely linked due to the fact that energy produced mostly by carbon based fuels.   In power, spot market are used primarily by the power generating industry whilst the future market will be used by both the industrial and financial players.  For emissions trading, it is expected that banks and hedge funds are expected to enter the future market business speculating on the prices and in the process bringing additional liquidity. (Source: Financial Times)

• Siam Cement Plans for Acquisitions

Siam Cement PCL, Thailand’s dominant industrial conglomerate, plans to invest as much as US $380 Mn in the coming months going toward the acquisition of paper and petrochemical plants.  Mr. Kan – who is expected to succeed Siam’s President Chumpol Nalamlieng after he retires around the end of 2005 – said the company is equally interested in takeover opportunities or joint venture with partners in Thailand and abroad.  He said that the company is currently reviewing the plan of investing on a Naptha Cracker plant with a capacity of 1.5 million tonnes per year and downstream production plant to take up its product.  It is expected that a decision will be made this year with construction to start between 2006 and 2007. (Source: Asian Wall Street Journal)

• Italy’s ENI challenges “Big Oil” – scoring deals on Central Asia Frontier.

ENI play the project main operator for the Kashagan oil field.  In the late 1990’s, ENI led an eight company group including the Royal Dutch Shell and Total which conducted the early survey in the area. In 2000, Shell has made a huge strike in this field.  ENI using its good relationship with Kazakh’s government make a dark horse play  to become the project’s main operator.  The operator is responsible for surmounting technical, logistical and political hurdles to bring the oil out of ground whilst other partner’s act mainly as investors.  The operation once oil begins to flow in 2008 will employ 20000 people and will require an investment of US$ 30 Bn to be shared by its partners over its production lifespan. Output in Kashaghan will reach a peak production of 1.2 million barrels per day by 2016. (Source: Asian Wall Street Journal).