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International Deals | PLS January 3, 2017 • Volume 09, No. 01 INTERNATIONALDEALS Serving the marketplace with news, analysis and business opportunities BP emerges from the shadow of Macondo Q4 lifts 2016 international Supermajor makes up for lost time with ~$4B in late 2016 acquisitions upstream M&A to $46.0B Back in July, BP CEO Bob Dudley told investors the supermajor had finally A wave of high-value Q4 deals “drawn a line” of US$5.2 billion under its estimated remaining liabilities from the 2010 headlined by two Russian corporate Deepwater Horizon disaster in the US Gulf of Mexico and was preparing “a new phase transactions rescued what otherwise would of growth.” In the last six weeks of 2016, BP delivered on that promise by announcing have been a dismal 2016 in the ~$4.0 billion in upstream acquisitions (plus a $1.3 billion downstream international upstream sector purchase—see story on PG. 11). and brought it closer to historical www.plsx.com/ma Between Nov. 25 and Dec. Latest M&A moves are return to UAE norms. Deal values totaled US$27.6 oil block & farm-in to Kosmos gas finds. 2, BP struck more than $830 million in billion in Q4 according to the PLS Global deals in Egypt, Indonesia and the UK North Sea (see Dec. 8 issue). It announced even M&A Database—1.5x the previous three more aggressive acquisitions in late December: returning to Abu Dhabi’s producing quarters combined—boosting the year’s ADCO concession for $2.19 billion and buying into Kosmos’ gas discoveries off total to $46.0 billion. Mauritania and Senegal for $916 million. Q4 deal value of $27.6B was 1.5x the The company has also reasserted itself in the E&P space with several project total for Q1 through Q3. announcements in the past two months. Continues On Pg 12 Rosneft pays $1.6B for 30% of Eni’s giant Zohr gas find Roughly half of the Q4 total and one- third of the annual total came from Qatar Eni agreed to sell 30% WI in its giant 2015 Zohr gas discovery to Rosneft for Investment Authority and Glencore’s US$1.575 billion. The state-controlled Russian oil giant will pay $1.125 billion cash $10.9 billion acquisition of a 19.5% and reimburse Eni for 30% of past capex totaling $450 million. The deal was announced shareholding in Rosneft and the Russian less than three weeks after Eni agreed to sell a 10% Zohr stake to BP for $525 million. state oil giant’s own $5.3 billion acquisition Both deals value the discovery at $5.25 billion. Combined, they will of a majority stake in smaller rival Bashneft. drop Eni’s operated stake in the Shorouk concession containing Zohr to But these were just two of six deals worth 60%. Both buyers have options Eni sells down to 60% in 2015 deepwater more than $1.0 billion apiece in Q4, vs. through YE17 to increase their find, Eqypt's largest discovery ever. five during the previous three quarters. stakes by 5% WI. Major 2016 deals included Rosneft selling Eni was awarded the deepwater Shorouk block in 2013, and its Zohr 1X NFW down stakes in major Russian projects to exploration well hit a 2,067-ft hydrocarbon column in August 2015. Based on six Indian and Chinese partners and Brazil’s successful wells drilled to date and seismic data, Eni estimates up to 30 Tcf of lean gas Petrobras selling prized pre-salt assets to in place over a 100-sq-km area, making Zohr the largest gas discovery ever in Egypt Total and Statoil. Continues On Pg 16 and the Mediterranean Sea. Continues On Pg 8 DEALS FOR SALE Total buys into two Petrobras pre-salt projects for $2.2B As the first transaction under a strategic partnership forged withPetrobras in October, UK STRATEGIC ALTERNATIVES Total has agreed to acquire stakes in pre-salt developments in Brazil’s offshore Santos 55-Onshore Licences. Basin and certain downstream assets for US$2.2 billion in cash, carry and contingent UNITED KINGDOM & SCOTLAND payments. The French supermajor will acquire an operated 35% WI in Lapa WEALD, GAINSBOROUGH TROUGH- PP field (formerly Carioca) on license BM-S-9 and a non-op 22.5% WI in the -BOWLAND & MORAY FIRTH BASINS >2,500 SEEKING STRATEGIC ALTERNATIVES BOED Berbigao, Sururu and West Atapu discoveries in the Iara area of license BM- 2015 Avg Net Production: 2,570 BOED S-11. Lapa came online in mid-December using an FPSO with 100,000 bo/d and 177 Net 2P Reserves: 13.33 MMBOE MMcf/d capacity. Production from Berbigao and Sururu is expected to commence in 2018 PP 1340CO via a 150,000 bo/d, 212 MMcf/d FPSO. The licenses contain two of Brazil’s Takes operated 35% of newly online BRAZIL SHALLOW WATER ASSETS Lapa field, 22.5% of Iara discoveries. 9-Concessions. largest producing fields—Lula on BM-S- SERGIPE & CEARA 11 and Sapinhoa on BM-S-9. Although Lula and Sapinhoa are not included in the deal, SHALLOW WATER ASSETS PP shared midstream infrastructure, supply-transport logistics and staff associated with Oil & Natural Gas Exploration Fields. these fields will help reduce development costs. Petrobras will remain operator of the WORKING INTEREST FOR SALE FOR Iara area fields with 42.5% and retain a 10% stake in Lapa. Avg. 2015 Production: 13,000 BOED SALE CONTACT INVESTOR RELATIONS DEPT Petrobras is already partnered with Shell (25%) and Galp (10%) on Iara and with PP 1102 Shell (30%) and Repsol Sinopec Brasil (25%) at Lapa. Continues On Pg 4 All Standard Disclaimers & Seller Rights Apply. INTERNATIONALDEALS 2 January 3, 2017 Latin America Global Marketplace Portugal’s REN buys into Chilean gas pipelines for $180MM Buyer/seller disconnect still The Chilean power generation unit of Italian utility Enel agreed to sell its 42.5% inhibits international market stake in gas pipeline operator Electrogas to Portuguese gas and electricity distributor Last month’s historic agreement on Redes Energeticas Nacionais (REN) for US$180 million. The 165.5-km reversible production cuts between OPEC and 11 pipeline system links the Quintero LNG regasification terminal in coastal Valparaiso non-OPEC countries has been greeted province to Santiago, where it supplies gas to several power plants, large industrial by cautious optimism. Obviously, the consumer companies and local gas distributors. planned 1.8 MMbo/d reduction for 2017 Enel owns an indirect 36.4% equity stake in seller Enel could finally stabilize energy markets, Generacion Chile, which expects to close the deal in 1Q17 and realize a $123 million depending on compliance. Ahead of the profit. Electrogas is co-owned by Enel Generacion Chile (42.5%), local power firm landmark meeting in Vienna, energy Colbun (42.5%) and state oil company ENAP. REN is making the acquisition as part executives at the Oil & Gas Council’s of its 2015-2018 strategic plan, which calls for expansion into international markets annual World Oil & Gas Week in London while keeping its primary operations in Portugal. reflected on the industry’s response to the Brookfield to acquire Odebrecht’s Peruvian pipeline project oil slump over the past two years. Having just struck a US$5.2 billion deal to acquire a 90% in Petrobras’ Nova Banks help sellers hold out for price Transportadora do Sudeste (NTS) gas pipeline network in Brazil, Toronto asset recovery by deferring writedowns. manager Brookfield is working on another gas pipeline acquisition in Peru. The firm has reached a preliminary agreement for construction conglomerate Odebrecht’s 55% Among the key takeaways gathered stake in the $5.0 billion onshore Gasoducto Sur Peruano project, Peruvian Finance by PLS Energy Advisors Group, it Minister Alredo Thorne in an interview was widely agreed that the bid/ask Toronto asset manager steps in after on the Canal N cable news channel. spread remains wide in the Sempra balks at corruption clause. Odebrecht has managed construction international upstream market. of 34% of the 1,100-km pipeline but is being forced out by creditors because of its Many sellers are unwilling to involvement in the Petrobras corruption scandal in Brazil. The company had been in deal until all other options are exhausted, advanced talks with a consortium of Sempra Energy and leading Latin American and banks and existing investors are steel maker Techint, but Sempra dropped its offer in November after the government assisting by restructuring debt and refused to remove from the contract an anti-corruption clause that would allow absorbing equity dilution. As a result, it to seize the project if Odebrecht was found to have broken any laws. Once built, aside from Shell/BG, the widely expected the pipeline will transport 800 MMcf/d from the 13 Tcf Camisea field operated by consolidation has failed to materialize. Pluspetrol in far northern Peru to consumers in the south. One positive result of downturn: E&P industry now living within its means. Pan American takes operated stake in Vaca Muerta acreage Buyers have been patient and Madalena Energy is selling an operated 55% WI in its Coiron Amargo Southeast selective. One small company described an block in Argentina’s Neuquen Basin to Pan American Energy, the country’s largest illustrative acquisition process: It looked private producer. Calgary-based Madalena will retain 35% WI, and provincial producer at 30 opportunities before moving forward Gas y Petroleo del Neuquen will continue to hold the remaining with three, of which one closed, one fell 10%. Pan American will pay US$10 million cash, carry out a 2017 away and one remains in discussion.
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