Drilling Deeper: The return of mergers and aquisitions?

Oil and Gas Industry Update

Headlines:

  • Despite the potential escalation of events in the Middle East after Turkey’s run in with Russia, crude benchmarks remained subdued and continue to trade near their YTD lows.
  • Repsol has been reported by Spanish press to have hired bankers to help them selltheir SE Asian operations (c. 130kboe/d), which span Indonesia, Malaysia and Vietnam, as the company seeks to meet its EUR6.2bn divestments target from 2016-20. The article suggested that they would be looking to achieve a valuation of c.EUR4bn (c.$4.5bn).

  • Petrobras lost 2.29 million barrels of oil and 48.4 million cubic meters of natural gas to 20-day strike that ended on last Friday.

  • Alberta outlined a plan to set a limit on oil sands emission and put a carbon price to tackle climate change. (FT)

  • US oil reverses jumped by c.9% to 39.9 billion barrels in 2014, while gas reserves soared c.10% to 388.8 Tcf; however, the lower oil prices have negatively impacted drilling activity and are expected to reduce the reserves level for the year end 2015.(EIA)

  • Norway Statistics: Oil investment in the country to fall further in 2016; investments estimates for 2016 were cut by c.6% from previous forecast. According to the latest estimates, investment is expected to fall by c.8% in 2016 vs. 2015 in addition to the anticipated c.33% decline in 2015 over 2014.

  • Alaska completed a $65mm buyout of TransCanada’s stake in the proposed Alaska LNG project, expected to start producing in 2025. The bought share will give the state an equal stake and negotiating power as ExxonMobil, BP, and ConocoPhillips.

  • The UK government cuts funding for its £1 billion carbon capture and storage competition technology (CCS). Shell halts the project to build a plant demonstrating CCS at Peterhead after the statement (The Guardian)

  • Russia might consider imposing restrictions on its Turkish Stream gas pipeline via Turkey after the latter put down one of the Russian fighter jets recently (Upstream)

  • Suncor said that it may scrap its $4.5bn hostile bid for Canadian Oil Sands Limited(COSL) if regulators endorse a poison pill that would give COSL more time to find bidders. Earlier, COSL had announced that it had already met with another potential bidder in order to fend off Suncor’s hostile bid, and plans to meet more bidders in the coming weeks. (Bloomberg)

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