THE Organization of Petroleum Exporting Countries (OPEC) earned nearly $1.154 trillion last year. It projected the earnings to remain at a historically high level of around $1.12 trillion in 2013.
Besides, PLS Inc. in conjunction with Derrick Petroleum Services, has put the global activity for upstream oil and gas deals in 2012 at $254 trillion in 679 deals.
The dataset is from their industry leading Global M&A Energy Transactions Database and includes all upstream oil and gas deals with values disclosed.
According to Brian Lidsky, Managing Director with Houston-based PLS Inc., “Total deal value in 2012 surged 50 per cent higher versus 2011 to a record of $254 billion, eclipsing the prior record of $212 billion in 2010.
However, during 2012, three mega deals accounted for $97 billion or 38 per cent of the total of the following: Rosneft’s $62 billion acquisition of TNK-BP. CNOOC Limited; $18 billion acquisition of Nexen; $17.2 billion buy of Plains Exploration and Production.
Excluding these mega deals, 2012’s activity in terms of deal value is on par with the prior five-year yearly average of $160 billion of deal activity.
Also, during fourth quarter 2012, we witnessed an unusually high level of deal activity totally $137 billion in 181 deals as many sellers were motivated to complete deals in advance of the uncertainties surrounding the second term of President Obama and the implication of the United States governmental policy changes regarding the fiscal cliff.
Also helping the 2012 record deal making was oil price stability. Not surprisingly, oil prices remained remarkably stable in 2012 and nearly mirrored the 2011 price path and remained in a band of $80 to $110 per barrel.
Activity in 2013 is expected to track back to normal as growing oil supplies, particularly in the North American market, have a number of analysts expecting oil prices to maintain current levels or trend lower.
The market has a healthy level of inventory as currently we are tracking over $85 billion of assets for sale where the estimated deal value is greater than $100 billion.
Chinese and other Asian NOCs remain on a global buying spree to shore up long term supply.
Managing Partner, Derrick Petroleum Service, Yashodeep Deodhar, aptly points out, “China thirst for buying global oil and gas assets in continuing unabated highlighted by CNOOC’s landmark $18 billion acquisition of Nexen Inc.
Following the bid for Nexen, Chinese companies continued buying; including Sinopec’s $2.5 billion purchase of Nigerian assets from Total, PetroChina’s $2.2 billion joint venture for unconventional assets in Canada with Encana, CNOOC’ $2 billion buy of additional interest in QCLNG project in Australia from BG and PetroChina’s $1.6 billion buy of an interest in Browse LNG project also in Australia from BHP Billiton.
Other large Asian NOC’s buying in 2012 include ONGC spending $5 billion for an interest in the Kashagan field in Kazakhstan from ConocoPhilips and $1 billion for an interest in the ACG field in Azerbaijan from Hess, Petronas acquiring Progress Energy in Canada for $5.8 billion and PTTEP outbidding Royal Dutch Shell to acquire Cove Energy for $1.8 billion.
Meanwhile, EIA gave no country breakdown for 2012 but Saudi Arabia, the UAE and other Gulf oil heavyweights are believed to have again netted nearly two thirds of the group’s income.
Nigeria emerged as the fourth largest gainer in 2011 with its income surging to $90 billion from $65 billion. The earnings of Iraq jumped to $71 billion from $49 billion while those of Angola grew to $68 billion from $56 billion.
Algeria netted about $63 billion last year compared with $50 billion in 2010 while the income of Venezuela shot up to $60 billion from $40 billion and those of Qatar to $57 billion from around $37 billion.
EIA’s figures showed Libya was the one odd out as the value of its oil sales tumbled to $13 billion from $44 billion because of disruption in its crude supply due to the war.
The report showed Ecuador, the smallest OPEC producer, earned around $10 billion in 2011 compared with $eight billion.
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