Africa Marginal and independent Oil/gas ProducerS Conference, 2018
Thursday, 25th - Friday, 26th October, 2018 | Crowne Plaza, 19 New Bridge Street, London
Africa booms in global oil and gas M&A deals, showing greater potentials in 2014
February 11, 2014
Africa has shown that it’s fertile for oil and gas merger & acquisition deals, having had about 17% of the global major deals amounting more than $12 billion done in that continent in 2013. Africa followed North America which had about 38% of the activities and the Former Soviet Union which cruised with 28% of oil and gas deals done in the globe towards the end of Q3 of 2013. While North America, Former Soviet Union and Africa emerged as the three major regions where significant deals were done, China and Russia came out to be the countries whose national oil companies made the biggest purchases.
Africa will continue to be a land of promise for most of the M & A activities in 2014 starting with most of the fields that will be divested by Shell in Nigeria, and the likely selling of its assets in Libya by Marathon. North America will also benefit from the soaring deals of 2014 especially the expected divestment of its Eagle Ford Shale assets by Shell. New deals are expected around the Mediterranean and Caspian Sea.
From Africa to North America and in the Former Soviet Union, M& A activities will surge by more than 8% this year. China, Russia and the India will continue to be the big pocket buyers. China and Russia are competing to harness more assets in Africa and FSU. More deals and presence of these two titans will be noticed in Nigeria, Chad, Niger, Sao Tome & Principe, Senegal, Libya, Algeria, Tanzania, Iraq Kurdistan area, Kazakhstan. This will lead to increase in foreign direct investment in Africa and the countries mentioned will catapult their various national GDP.
The presence of China, Russia and India will also be prominent in East Africa. While most America companies will be consolidating their investments in West Africa, they will toe along China and Russia in shopping for new deals in East Africa, around the Caspian Sea and the Former Soviet Union.
Some of the outstanding deals that took place by the end of the Q3 of 2013 is the China’s CNPC purchase of 8.4% stake of ConocoPhillips’ Kashagan field in Kazakhstan for $5b being the highest deal done in the Former Soviet Union, Sinopec’s (China), $3100b buying from Apache in Egypt, Fieldwood Energy’s purchase from Apache in USA worth $3,750b, Rosneft (Russia) deal with Itera in Egypt which was $2,900b; ONGC (India) activity with Anadarko in Mozambique which amounted to $2,640billion,etc.
North America led globally with 229 deals worth $26,831, followed by the Former Soviet Union with 16 deals totaling $18,831,however, Africa with 15 deals at the end of Q3 summing up to $12,200 showed that by weight of deals Africa came out stronger than the rest, dwarfing Europe, Asia and Canada at a tremendous pace.
The increase in number of M & A activities experienced since the end of Q2 2013 was adduced to the promising price of oil which averagely did not fall below $100 per barrel. It is been forecasted that the beginning of 2014 will be full of new deals and this trend is expected to continue throughout 2014 which will be a good year for oil and gas business.
Deep water activities and marginal offshore development in West Africa and Brazil are bound to attract huge investments in 2014. Not only will significant M&A activities take place in that sphere, technology companies will witness a lot of acquisitions and mergers. As the market continues with promising growth in the New Year, most of the industry constructions on vessels, rigs and other platforms will be done in China where companies are getting good financial deals at comfortable rates and payback period. Singapore and South Korea will also benefit from the construction boom this year.
It is expected that Europe and Canada will have their companies teaming up to meet the market competition in order to grab sizeable share of the pie. United Sates will remain the center for services, design and home for conceptions of emerging technologies.