Around US$6 billion in M&A activity involving UK oil and gas companies has taken place during the first half of 2017 – with more activity predicted for the remainder of the year and into 2018.
Total’s recent deal to acquire Maersk Oil & Gas A/S heads the list of deals involving North Sea assets this year, according to Evaluate Energy M&A data.
Source: Evaluate Energy M&A Database
Assets changing hands and the increasing diversity in their ownership suggests that the UK Continental Shelf may start to benefit from a badly needed investment boost, according to the findings of an annual economic report authored by Oil & Gas UK.
“There are still serious issues facing our industry which has suffered heavy job losses since the oil price slump,” said Deirdre Michie, CEO of Oil & Gas UK. “But we are hopeful that the tide is turning and expect employment levels to stabilise if activity picks up.”
The report says low levels of exploration and appraisal activity remain a serious concern with drilling at record lows. Oil & Gas UK said the basin needs further capital investment, as only three new field approvals have been sanctioned since the start of 2016.
Additional report findings:
- The cost of lifting oil from the North Sea has almost halved since 2014 – this improvement to unit operating cost is greater than improvements achieved by any other basin
- Production has increased by 16% since 2014 – driven by production efficiency improvements, brownfield investment and new field start-ups
- Changes to the tax regime have helped create one of the most competitive fiscal regimes for upstream investment globally