Dominoes in Southeast Asia M&A space starting to fall, WoodMac says

Southeast Asia could take center stage in the region’s upstream M&A activity in 2019, with up to $14 billion worth of assets potentially switching hands, according to a new report by energy intelligence group Wood Mackenzie. 

Upstream M&A in the Asia-Pacific region is off to a strong start this year, with $2.8 billion worth of deals already announced in the first quarter of 2019.

This includes Murphy Oil’s $2.1 billion divestment of its Malaysia business to Thailand’s national oil company (NOC) PTTEP. With the exit, Murphy Oil will focus on its core positions in US Gulf of Mexico, North American onshore and Latin America.

“We have observed for a while now the trend of oil Majors exiting countries in the region as their portfolios mature and contracts expire. Drawn to more commercially compelling opportunities elsewhere, Southeast Asia is also becoming a non-core region for large- and mid-cap international oil companies (IOCs),” said Wood Mackenzie research director Andrew Harwood.

Asia-Pacific upstream deal spend hit $8.7 billion last year, accounting for over a third of global spend (excluding North America). This increase in activity was primarily driven by a reshuffling of portfolios in Australia and New Zealand. However, Southeast Asia is set to feature more prominently in 2019, with more than 5.4 billion barrels of oil equivalent (boe) of predominantly gas assets potentially coming to market.

Alongside retrenchment by traditional E&P players, 2019 M&A potential will also be driven by regional NOCs farming down assets to bring in technical and financial partners to manage newly-expanded portfolios. In fact, two of the region’s biggest portfolio owners, PERTAMINA and PTTEP, must spend a collective $32 billion over the next five years to maintain their domestic supply outlook.

“Pre-development projects that have been stalled during the oil price downturn is also another theme for smaller players and new entrants to take note of. As economic conditions improve, there could be new owners and new capital looking to monetize these assets,” added Harwood.

With the region’s M&A stakes stacked high, it begs the question: Who are the potential buyers?

Harwood said: “The M&A bear view would be that there is a smaller universe of potential buyers, but we think regional NOCs, Middle Eastern operators and regional specialists, continue to be active players shoring up assets in Southeast Asia.

“Recent global corporate activity will have a knock-on effect on Southeast Asia portfolios. And changes in the regional investment climate following recent elections, fiscal adjustments and exploration success could spur new activity. The dominoes in Southeast Asia’s M&A space have already started to fall.”


Spotted a typo? Have something more to add to the story? Maybe a nice photo? Contact our editorial team via email.

Offshore Energy Today, established in 2010, is read by over 10,000 industry professionals daily. We had nearly 9 million page views in 2018, with 2.4 million new users. This makes us one of the world’s most attractive online platforms in the space of offshore oil and gas and allows our partners to get maximum exposure for their online campaigns. 

If you’re interested in showcasing your company, product or technology on Offshore Energy Today contact our marketing manager Mirza Duran for advertising options.

Share this article

Follow Offshore Energy Today

Events>

<< Oct 2019 >>
MTWTFSS
30 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3

Executive Oil Conference & Expo 2019

Executive Oil Conference and Exhibition is a unique opportunity to meet with all of the region’s…

read more >

Oil & Gas Vietnam 2019

Oil & Gas Vietnam (OGAV) 2019 is the only specialized oil & gas event in Vietnam that brings together an international congregation of both upstream and downstream oil and gas companies and also its supporting industries gathered in the heart of Vietnam’s oil and gas industry in Vung Tau, to showcase the latest developments in the oil and gas industry.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply