Oil & Gas 2010 Deal Trends - M&A Values Rise and China makes a bid for America

Tuesday, Jan 04 2011 by
6
Oil  Gas 2010 Deal Trends  MA Values Rise and China makes a bid for America

Oil and gas deals in the E&P sector reached $73 billion in the 4th quarter of 2010 with deals for the year totalling $238 billion, compared with $151 billion in 2009.

The total deal value in the last quarter of this year is second only to Q3 2010 in recent years, even outscoring Q4 2009 - a quarter that included ExxonMobil’s $41 billion acquisition of XTO Energy. That’s according to an analysis of Evaluate Energy’s in-depth M&A database.

At least four key trends emerge from the pattern of oil and gas deals in 2010:

 

  • A marked shift in Chinese activity away from Africa towards the Americas.
  • A growing interest in shale plays containing liquids and some interesting new innovative approaches to monetising shale resources, prompted by the widening gap between gas and oil prices.
  • A trend towards taking companies private
  • The nearing completion of a dramatic series of divestitures by BP

China Shifts Acquisition Focus to the Americas

Following a quarter of inactivity in Q3 2010, Chinese state companies satisfied their appetite for foreign assets with a flurry of deals in Q4 2010, ending the year with a total of $31 billion in E&P acquisitions. This compares with a total of $19 billion spent by Chinese companies on E&P assets in 2009. In this time the Chinese government has been agnostic towards the location of their acquisitions, with major deals being conducted across 14 different countries. Whilst Africa was the main focus of acquisitions in 2009, Canada and South America dominated China’s deals in 2010, accounting for 8 of the top 10 deals by Chinese companies during the year. Amongst the key drivers of deal value during the fourth quarter was the spending by Chinese companies in Latin America. The largest deal of the quarter came from Sinopec acquiring a 40% stake in Repsol Brasil for $7.1 billion and gaining a foothold in the increasingly popular Brazilian offshore pre-salt reserves. This sector is about to undergo major development with the massive $43 billion deal by Petrobras and consequent financing paving the way for a development charge. The second largest deal of the quarter came from the acquisition by Bridas Corp (50% owned by CNOOC) of BP’s 60% stake in Pan American Energy, the second largest oil and gas producer in Argentina for $7 billion. Sinopec added further to China’s Argentinean assets by acquiring Occidental’s Argentinean E&P portfolio for…

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BP p.l.c. is an integrated oil and gas company. The Company provides its customers with fuel for transportation, energy for heat and light, lubricants to keep engines moving and the petrochemicals products used to make everyday items as diverse as paints, clothes and packaging. The Company operates through three segments: Upstream, Downstream and Rosneft. Its Upstream segment is engaged in oil and natural gas exploration, field development and production; midstream transportation, storage and processing, and the marketing and trading of natural gas, including liquefied natural gas (LNG), together with power and natural gas liquids (NGLs). Its Downstream segment is engaged in refining, manufacturing, marketing, transportation, and supply and trading of crude oil, petroleum, petrochemicals products and related services to wholesale and retail customers. Rosneft is an oil company, which has a resource base of hydrocarbons onshore and offshore. more »

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About EvaluateEnergy

EvaluateEnergy

Evaluate Energy is a provider of up to date and accurate oil and gas analysis for industry professionals. 



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