Fewer global deals, capital raising healthy: report

An offshore oil rig

An offshore oil rig

London-based consulting firm, GlobalData has revealed new figures showing an 18 per cent decline in upstream oil and gas deals.

A statement from the consulting firm released yesterday shows upstream oil and gas deals, including capital markets and mergers and acquisitions, declined from $23.6 billion in May to $19.3 billion in June from 125 transactions.

GlobalData’s latest monthly report on upstream deals detailed a number of notable M&As, largely in Europe, Middle East and Africa (EMEA).

An estimated $4 billion over 18 acquisitions were announced in the EMEA region during the month of June.

“M&A momentum continued in June with Emirates National Oil Company proposing a buy-out of Dragon Oil, BP buying a stake in one of Rosneft’s Siberian fields, and Wintershall selling a package of North Sea assets to Tellus Petroleum (Tellus),” Matthew Jurecky,
GlobalData’s head of oil and gas research and consulting said.

Mr Jurecky also noted merger announcements between Vedanta and Cairn India, and Cenovus and the Ontario Teachers’ Pension Plan totalling almost $5 million.

“Market conditions will continue to fuel a desire for M&A. After a failed attempt years ago, Emirates National Oil Company is another case of a company taking advantage of depressed asset values to consolidate ownership in one of its positions, Dragon Oil.”

The GlobalData analyst said while companies are actively raising capital to avoid financial turmoil off the back of the oil price collapse.

“Companies continue to seek financial flexibility and restructure short- and reserves-based capital to avoid bankruptcy.”

Enter your details to subscribe to the free fortnightly Gas Today e-newsletter

Thank you for signing up for the Gas Today Online Update.