REG - Competition and Mkts - Offshore drilling merger has competition concerns

AP Moeller - Maersk A/SAnnouncement

22/04/2022 08:45

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RNS Number : 0319J  Competition and Markets Authority  22 April 2022

 

Offshore drilling merger raises competition concerns

 

The CMA has found that the merger of Noble and Maersk Drilling could increase
operating costs for oil and gas producers in the UK North Sea.

 

In February, the Competition and Markets Authority (CMA) opened an
investigation into the approximately £2.6 billion anticipated merger between
Maersk Drilling and Noble Corporation.

 

Noble and Maersk Drilling are both globally active offshore drilling
contractors for the oil and gas industry. The CMA's investigation primarily
focussed on the two businesses' overlapping activities in the supply of a
certain type of platform, known as a 'jack-up' rig, commonly used for offshore
drilling by UK customers in the North Sea.

 

Following its Phase 1 investigation, the CMA has found the deal raises
competition concerns in the supply of jack-up rigs for offshore drilling in
North West Europe (the area comprising the UK, Denmark and the Netherlands).
The merging business are two of the four main suppliers in this market and
have frequently competed against each other for contracts in the past. The CMA
is concerned that the combined businesses would not face sufficient
competition after the merger, which could lead to higher prices and lower
quality services for oil and gas producers in the North Sea.

 

If the merging businesses are unable to address the CMA's concerns, the deal
will be referred for an in-depth Phase 2 investigation, to be carried out by a
group of independent CMA panel members.

 

Colin Raftery, Senior Director of Mergers at the CMA, said:

 

"Offshore drilling services are critical for oil and gas producers. Our
investigation showed that Noble and Maersk have competed closely in the past
and face only limited competition.

 

"We're therefore concerned that the loss of competition that this deal would
bring about could result in higher prices or lower quality services,
increasing operating costs for oil and gas producers in the UK North Sea."

 

Noble and Maersk Drilling have 5 working days to offer proposals to the CMA to
address the competition concerns identified. The CMA would then have a further
5 working days to consider whether to accept these in principle instead of
referring the case to a Phase 2 investigation.

 

For more information, visit the Noble Corporation / Maersk Drilling merger
inquiry page
(https://www.gov.uk/cma-cases/noble-corporation-slash-maersk-drilling-merger-inquiry)
.

 

Notes to Editors

1.   On 23 February, the CMA gave notice under section 96(2A) of the
Enterprise Act 2002 that the merger notice provided by Noble Corporation
(Noble) and The Drilling Company of 1972 A/S (Maersk Drilling) in relation to
the anticipated merger between both companies meets the requirements of
section 96(2) of the Act.

2.   All media enquiries should be directed to the CMA press office by email
on press@cma.gov.uk (mailto:press@cma.gov.uk) , or by phone on 020 3738 6460.

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