The value of global oil & gas deals reached $85 billion during Q3 2010, driven by the massive $42.5 billion deal between Petrobras and the government of Brazil and strategic reorganisations of assets by super-majors including BP (LON:BP, NYSE:BP) and ConocoPhillips (NYSE:COP). That’s according to Evaluate Energy’s Global M&A database which tracks all global oil and gas deals on a daily basis. Excluding the Petrobras deal, total deal value in the exploration and production sector is still slightly higher than the previous two quarters and far in excess of total deal value in Q3 2009, when the credit crunch was still significantly affecting commodity prices and access to finance.
Richard Krijgsman CEO at Evaluate Energy commented, “Last quarter, we saw the biggest volume of exploration and production deals ever. We are seeing major structural shifts in the market as publically quoted and national oil companies vie for reserves, and the M&A market is simply reflecting this trend.”
Deepwater Resource Lures Brazilian Investment
In September, Petrobras (NYSE:PZE) and the government of Brazil reached an agreement in which Petrobras transferred $42.5 billion of stock in exchange for the rights to 5 billion barrels of oil reserves in deepwater areas offshore Brazil. As a result of the share issue, the Brazilian government gained an increase in voting stock ownership of Petrobras from 57.5% to 64%. Additionally Petrobras has so far raised a further $27.5 billion via a share issue, with the funds earmarked for the high development costs associated with the deepwater assets. Including the shares transferred as part the deal with the government the $70 billion share issue by Petrobras was the largest ever share issue.
With Sinopec last week negotiating a deal to take a 40% stake in Repsol Brazil for $7.1 billion, the total value of deals for Brazilian deepwater assets rose to $56 billion for 2010, representing 32% of global deal value. Repsol Brasil owns interests in a number of early development deepwater Brazilian fields, including a shared interest in Guara, which forms part of the deal between Petrobras and the Government of Brazil.
Interest in US Shale Gas Sector Loses Momentum
In Q3 2010 with the Henry Hub benchmark gas price dropping steadily to end below $4, total shale deals came in at just $5.8 billion for the quarter with the majority of…
