Oil & Gas assets come to market, China is the aggressive buyer

US$90B in Global Crude Oil and Nat Gas assets are on the market as deal activity in the sector accelerates, according to industry estimates.

Driven Big Oil move to sell non-core assets, the selling has gathered momentum over the past 2 yrs, according to Derrick Petroleum Services, the industry research and consulting firm.
The value of industry assets that were on the market in the middle of Y 2009 was just US$20B and at the start of Y 2010, it was US$46B.

The US$90B + figure is significant as it comes after a number of deal announcements in the last 3 months of this year, including significant asset sales by BP (NYSE:BP), the Giant UK Oil group.

The rise in activity comes as International oil companies including BP, Royal Dutch Shell (NYSE:RDS-A), ExxonMobil (NYSE:XOM) and ConocoPhillips (NYSE:COP) have put large bundles of non-core assets on the selling block in order to raise funds to help pay for significant new exploration and production ­programs.

The World’s major Oil Groups are under intense pressure to boost returns for investors. In recent years returns have come disproportionately from dividends and share buy-backs rather than from capital growth, prompting some industry watchers to compare the companies to utilities and hence price them to market as such.

BP has led the way with plans to sell up to US$30B of assets to help pay for the Gulf of Mexico spill although it has already sold close to US$22B.

Shell is selling some of its Nigerian assets while both BP and ExxonMobil have put some of their assets in the North Sea up for sale. Some substantial Nat Gas assets are also up for sale in Canada.

Industry experts say, that the market has been clearing, because there is still “more money than assets.”.

A relatively stable Crude Oil price, between 70 and 90 bbl, throughout 2010 has underpinned Strong balance sheets.

The Chinese national oil companies have been the most aggressive buyers in the market, most notably in Latin America.—Paul A. Ebeling, Jnr. www.livetradingnews.com

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Posted by Shayne Heffernan on Dec 28th, 2010and filed underBRIC, Commodities, Energy, Equities, Heating Gas, Latest News, Markets, Natural Gas, Oil, Unleaded Gas.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site