Russia 110314 Basic Political Developments
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Most Since 2007Last year’s deal volume of $122.5 billion was the most since 2007, when U.S. and Canadian energy companies were targets in $125 billion of sales, according to Bloomberg data. The 580 oil and gas transactions in 2010 were the most since 2007. In North America, growing oil and gas production onshore is creating a greater need for pipelines, processing plants and storage. Demand for those assets also will drive deals, Asmus said. Growth has been driven by development of more “unconventional” resources such as those found in dense shale rock and Canada’s oilsands. Advances in directional drilling and so-called hydraulic fracturing techniques have increased production from shale fields. Hydraulic fracturing injects water, sand and chemicals into the rock to break it open and release the gas. The number of transactions this year should surpass 2010 because oil prices above $100 a barrel are offering greater cash flow, and because debt markets are making money more available for independent producers, Asmus said. Private equity players also are expected to be more active this year in the energy industry, he said. ‘Corporate to Corporate’ “I think we’ll see more corporate to corporate business than we did in 2010,” said Peter Gaw, global head of oil and gas at Standard Chartered Bank. The deals will supplement acquisitions of single assets or asset stakes. U.S. natural-gas producers, increasingly cash-strapped after a decline in gas prices, are eager to find partners to develop new unconventional assets, said John B. Connally, a partner with the Houston law firm of Vinson & Elkins LLP. As U.S. producers paired their expertise with cash-rich overseas companies inexperienced in operating in unconventional oil and gas operations, “it was kind of a delightful match,” Connally said. Chesapeake Energy Corp., which has clinched seven joint ventures in the past four years, is planning another this year in an undisclosed field, Chief Executive Officer Aubrey McClendon said last month. Asia InterestJapanese and South Korean companies may lead the next round of joint-venture stakes, Scott Sheffield, chief executive officer of Pioneer Natural Resources said in an interview at CERAWeek. Sheffield declined to name which companies might be involved. Pioneer sold a 45 percent stake in its holdings within the Eagle Ford oil and gas field of south Texas last year to India’s Reliance Industries Ltd. for $266 million in cash and a commitment to fund $1.1 billion in Pioneer’s drilling costs. Cnooc Ltd. is expected to generate free cash flow of $3.87 billion this quarter, second among global energy companies behind Exxon Mobil Corp., at $6.1 billion, according to analysts’ estimates compiled by Bloomberg. Royal Dutch Shell Plc, refiner TNK-BP Holding, BP Plc, Chevron Corp., ConocoPhillips, Total SA, Sasol Ltd. and OAO Lukoil all are forecast to have more than $1 billion left over after operational expenses and planned capital spending.
“If we are lucky in identifying a good partner, we are ready to be actively involved in the U.S.,” Alekperov said. “You will see more debt-funded acquisitions by independents, which we haven’t seen for several years because of the credit markets,” Asmus, of Morgan, Lewis & Bockius, said. “I think you may also see somewhat larger deals, because the extra availability of credit will allow companies to make larger acquisitions than they might have done otherwise.” Bruce Bilger, a senior adviser at Lazard Ltd. sees a global convergence in mergers and acquisitions. “It’s much easier today than it was five years ago, 10 years ago, to find investment opportunities” around the world, he said, speaking at a forum at CERAWeek on March 8.
Sasol Ltd., the largest producer of motor fuels made from coal and natural gas, doubled its initial investment in Canadian shale-gas fields March 8, agreeing to pay C$1.05 billion for a stake in a second project of Talisman Energy Inc. “Shale gas is clearly a game changer in the U.S. and it’s changing the dynamics, the gas market dynamics in North America,” Pat Davies, Sasol’s Chief Executive said on an earnings call on March. 7. “We’ll be looking at further gas acquisitions. “We certainly have the balance sheet to be able to do that,” Davies said. For Related News and Information:To contact the reporters on this story: David Wethe in Houston at dwethe@bloomberg.net Jim Polson in New York at jpolson@bloomberg.net To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net. TNK-BP Fails To Settle Dispute With BP Over Rosneft Dealhttp://www.rttnews.com/Content/TopStories.aspx?Node=B1&Id=1574378 3/14/2011 12:52 AM ET (RTTNews) - British oil giant BP plc (BP: News ,BP_UN.TO: News ,BP.L: News ) and its Russian joint venture TNK-BP failed to settle their dispute regarding a planned $16 billion deal between BP and Russian state-controlled oil company OAO Rosneft. Talks at a board meeting held in Paris between BP and TNK-BP's management on Saturday ended in a stalemate over whether to allow TNK-BP to participate in the deal reached between BP and Rosneft in January to explore the Russian Arctic. The BP-Rosneft deal proposes a share swap that would give Rosneft a 5 percent stake in BP and allow BP to jointly explore and develop parts of the Russian Arctic with Rosneft. In turn, BP would get 9.5 percent of Rosneft's shares in the deal. The arctic development project comprises three license blocks that were awarded to Rosneft in 2010 and cover about 125,000 square kilometers in a highly prospective area of the South Kara Sea. BP and a group of Russian billionaires, known as the Alfa-Access-Renova or AAR consortium, co-own the TNK-BP joint venture. TNK-BP is the third largest oil company in Russia. AAR has contended that BP's deal with Rosneft is a violation of its shareholder agreement with BP for the Russian joint venture. AAR has proposed that both the share swap and the Arctic development project with Rosneft should be transferred from BP to TNK-BP. The AAR consortium has four representatives on the TNK-BP board, which also includes four BP-nominated directors and three independent directors. A proposal submitted by Mikhail Fridman, TNK-BP's chief executive, had proposed to the venture's board that BP be replaced by TNK-BP in both the share swap and the Arctic exploration with Rosneft. But BP's representatives on the TNK-BP board voted against the plan at the meeting on Saturday. BP said it was prepared to explore the possibility that it be replaced by TNK-BP in the Arctic development project, but would not change the terms of its share swap. BP said that a proposal offered by its nominated directors which would have allowed TNK-BP to hold talks with Rosneft about pursuing the Arctic exploration project was rejected by AAR. TNK-BP's management countered BP's statement saying that the company's comments were "misleading and inaccurate". They added that the BP proposal had ruled out involving TNK-BP in the share swap. "If BP, which owns 50 per cent stake in TNK-BP, will be the largest private shareholder of one of the major competitors of TNK-BP, this will inevitably lead to conflicts of interest and create new tensions between the shareholders," TNK-BP said in a statement. Directory: gifiles -> attach attach -> British Forces – Akrioti, Greece Griffin Fighter Squadron (84 Squadron raf) MoD announced possible Typhoon and Tornado arrivals to the base France attach -> Russia 110204 Basic Political Developments attach -> Unclassified//for official use only attach -> Adaptability Sustainment attach -> Pop-up 1 ("C" Chechnya) Header Text: Emir of the Caucasus Emirate Doku Umarov Image attach -> Russia and Islam are not Separate attach -> Chapter 13: The Northern Caucasus attach -> Russia 100209 Basic Political Developments attach -> The evolution attach -> The devolution Download 322.18 Kb. Share with your friends:
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