The oil and gas business is moving into a new age for financing. With groups like private equity becoming more prominent (just this week, PE-backed Terra Energy put down $910 million to acquire 200,000 acres in the Piceance Basin of the western U.S.).
But two new deals the last few days suggest that another unconventional source of petro-finance may be on the rise globally.
The Middle East.
On Tuesday, state-owned Qatar Petroleum made a big step-out from its home base. By acquiring a 30% interest in three deepwater licenses in offshore Morocco from operator Chevron.
And the same day, another Middle Eastern player — Oman’s Petrogas E&P — struck a big buy in the offshore. This coming even further afield: in the North Sea.
Petrogas signed an agreement to acquire all of the North Sea assets of Sweden’s PA Resources. Which includes oil and gas discoveries in the offshore of Denmark — as well as exploration acreage in the U.K., Germany and the Netherlands.
The move comes as PA Resources has been under pressure to sell assets to pay down outstanding debt. A theme that’s becoming very common across the oil and gas industry — and which Middle Eastern firms may be using to their advantage in buying fields on the cheap.
Interestingly, players from this region weren’t very active in global M&A during the boom times of the last several years. In fact, Qatar Petroleum’s Morocco purchase will represent the second-largest interest in a foreign project ever taken by the firm (behind the 40% it owns in Canadian onshore assets).
It’s thus possible that Middle Eastern companies are sensing an opportunity in today’s depressed markets. And starting to make a move to capitalize — which could open up a new financing source for projects globally.
Watch to see if the trend toward rising petro-investment from this part of the world continues.
Here’s to going abroad,