Downstream activities such as refining and petrochemicals resulted in only five investments in 2013 although Ernst & Young said there was potential for some refinery upgrades and expansions to be finalised this year.
Regional oil and gas deals increase by 15 per cent in 2013
The total value of oil and gas deals in the region grew by 15 per cent last year, with the UAE, Iraq and Oman representing more than half of that.
Transactions were also bigger on average – $3.1 billion a piece compared to $2.7bn in 2012 – although the actual number of them fell, said Ernst & Young in a report released yesterday. The American financial services firm counted 26 transactions last year, down from 44 the previous year.
“Rapid-growth markets have been, in recent years, the engine room of the world’s economic growth,” said Thorsten Ploss, Ernst & Young’s regional oil and gas head. “This provided oil and gas companies with brighter prospects, attracting them to invest in regions such as the Middle East to supply such growth.”
Downstream activities such as refining and petrochemicals, key to diversifying the economy away from oil, resulted in only five investments last year, although Ernst & Young said there was potential for some refinery upgrades and expansions to be finalised this year.
Another deal awaited this year is Occidental Petroleum’s prospective sale of a slice of its regional oil and gas business, which is comparable in size to that of legacy majors such as ExxonMobil or Total.
“There has been a recent announcement that Occidental Petroleum is looking to sell a minority stake in their Middle East oil and gas business,” said David Baker, the regional head of oil and gas transaction advisory services. “If this sale is to proceed, then it would represent a substantial transaction in the context of the Middle East market.”
The region represents a small but steadily growing slice of global hydrocarbons deals: 1.8 per cent last year, up from 1.5 per cent in 2012 and 0.8 per cent in 2011.
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