Energy Expert

Thierry Bros, PhD

Thierrybros.com

Thematic (Sector/Industry)

In Saudi Arabia, the Saud family wants to launch an Initial Public Offering (IPO) for 5% of Saudi Aramco, the biggest worldwide oil company (10,1mb/d of oil produced in 2015) for more than $100bn while implementing the 0,5mb/d production cut agreed at the 30 November 2016 OPEC meeting. Could this opaque company be valued trillions of dollars as Saudi Arabia tells the Press? Maybe not!Or could after 39 years, <a href="https://www.smartkarma.com/entities/811" target="_blank" data-smartkarma-citation="entities:811:1">Exxon Mobil Corp (XOM US)</a>, via the IPO process, re-enter Saudi Aramco capital? Saudi…

In Saudi Arabia, the Saud family wants to launch an Initial Public Offering (IPO) for 5% of Saudi Aramco, the biggest worldwide oil company (10,1mb/d of oil produced in 2015) for more than $100bn while implementing the 0,5mb/d production cut agreed at the 30 November 2016 OPEC meeting. Could this opaque company be valued trillions of dollars as Saudi Arabia tells the Press? Maybe not!Or could after 39 years, Exxon Mobil Corp (XOM US), via the IPO process, re-enter Saudi Aramco capital? Saudi…

LNG, Oil & Gas, M&A Market Intelligence Specialist

Massimo Bellino

M&amp;A deal volume in the oil and gas sector (1) increased markedly in 2016 both in the US by 67% (YoY) and globally by 50% if using normalised data for 2015 without the one-off $82bn Shell/BG deal (2). The growth was driven, particularly at the global level, by a surge of multi-billion dollar transactions announced in 4Q16 with total volume reaching over $30bn in December alone which represented 23% of the yearly total.The key factor supporting M&amp;A activity was the steady rise in oil prices, up by over 100% since the historical minimum for twenty years in January last year. Uplifting oil prices also sustained the exceptional rally in 2016 of global oil and gas equity prices which outperformed the market by 20% as tracked by S&amp;P global indexes.The emergence on the buy-side of large acquisitions of oil majors that up to very recently had been mainly focused on disposal plans could signal a shift in the expectations for the sector outlook. Among the deals announced in 4Q16, there were three acquisitions by <a href="https://www.smartkarma.com/entities/21847" target="_blank" data-smartkarma-citation="entities:21847">BP PLC (BP/ LN EQUITY)</a> totalling $3.8bn, <a href="https://www.smartkarma.com/entities/812" target="_blank" data-smartkarma-citation="entities:812">Total Sa (FP FP) </a>purchasing $2.5bn assets in Brazil and Siccar Point buying OMV’s UK assets for up to $1bn which was the largest private equity-backed acquisition in oil and gas outside North America of the last three years.The recent rush of M&amp;A deals involving major industry players and private equities could indicate a growing consensus that the oil cycle has bottomed out and that the industry is successfully adapting to the lower oil prices. As the number of global announced or rumoured assets for sale continues to grow, totalling an estimated value close to $190bn (3), the opportune time might have come to expand portfolios before asset prices rise again.Together with oil majors also an increasing number of cash-rich buyers, especially private equities, are expected to step up global investments in oil and gas in the coming months. As a result, M&amp;A activity should grow further this year and provided oil prices confirm the expectations implied by the improved business sentiment, the oil and gas sector will continue its recovery in 2017.<a href="#_ftnref1" target="_blank"></a>(1) For the purpose of this insight the oil and gas sector includes only activities of exploration, extraction and production of oil and gas i.e. upstream and excludes midstream, downstream and oil services.<a href="#_ftnref2" target="_blank"></a>(2) Including Shell/BG deal the M&amp;A growth in 2016 (YoY) would be 1% based on Bloomberg data.<a href="#_ftnref3" target="_blank"></a>(3) As estimated by Energy Market Square a new online platform providing market intelligence for oil and gas M&amp;A professionals.

M&amp;A deal volume in the oil and gas sector (1) increased markedly in 2016 both in the US by 67% (YoY) and globally by 50% if using normalised data for 2015 without the one-off $82bn Shell/BG deal (2). The growth was driven, particularly at the global level, by a surge of multi-billion dollar transactions announced in 4Q16 with total volume reaching over $30bn in December alone which represented 23% of the yearly total.The key factor supporting M&amp;A activity was the steady rise in oil prices, up by over 100% since the historical minimum for twenty years in January last year. Uplifting oil prices also sustained the exceptional rally in 2016 of global oil and gas equity prices which outperformed the market by 20% as tracked by S&amp;P global indexes.The emergence on the buy-side of large acquisitions of oil majors that up to very recently had been mainly focused on disposal plans could signal a shift in the expectations for the sector outlook. Among the deals announced in 4Q16, there were three acquisitions by BP PLC (BP/ LN EQUITY) totalling $3.8bn, Total Sa (FP FP) purchasing $2.5bn assets in Brazil and Siccar Point buying OMV’s UK assets for up to $1bn which was the largest private equity-backed acquisition in oil and gas outside North America of the last three years.The recent rush of M&amp;A deals involving major industry players and private equities could indicate a growing consensus that the oil cycle has bottomed out and that the industry is successfully adapting to the lower oil prices. As the number of global announced or rumoured assets for sale continues to grow, totalling an estimated value close to $190bn (3), the opportune time might have come to expand portfolios before asset prices rise again.Together with oil majors also an increasing number of cash-rich buyers, especially private equities, are expected to step up global investments in oil and gas in the coming months. As a result, M&amp;A activity should grow further this year and provided oil prices confirm the expectations implied by the improved business sentiment, the oil and gas sector will continue its recovery in 2017.(1) For the purpose of this insight the oil and gas sector includes only activities of exploration, extraction and production of oil and gas i.e. upstream and excludes midstream, downstream and oil services.(2) Including Shell/BG deal the M&amp;A growth in 2016 (YoY) would be 1% based on Bloomberg data.(3) As estimated by Energy Market Square a new online platform providing market intelligence for oil and gas M&amp;A professionals.

Growth of M&A Activity Signals Positive Outlook for Oil and Gas in 2017

Russia

Rosneft Oil Company produces and markets petroleum products. The Company explores, extracts, refines, and markets oil and natural gas. Rosneft produces oil in Western Siberia, Sakhalin, the North Caucasus, and the Arctic regions of Russia.

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Rosneft Oil PJSC (ROSN RM)

Saudi Aramco Value: $tn? Maybe Not!

In Saudi Arabia, the Saud family wants to launch an Initial Public Offering (IPO) for 5% of Saudi Aramco, the biggest worldwide oil company...

Thierry Bros, PhD

Growth of M&A Activity Signals Positive Outlook for Oil and Gas in 2017

M&A deal volume in the oil and gas sector (1) increased markedly in 2016 both in the US by 67% (YoY) and globally by 50% if using normalised...

Massimo Bellino

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