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Deal activity in the oil and gas industry in the Middle East and Africa dropped by 32.92 percent in the first quarter of 2021 compared to the last four-quarter average, data and analytics company GlobalData said in a new report.
As many as 27 deals worth US$4.81 billion were announced in the Middle East and Africa region during the first quarter of this year, compared to the last four-quarter average of 40.25 deals.
Mergers and acquisitions (M&A) accounted for all deal activity in the region this past quarter, according to GlobalData’s deals database.
The five biggest deals in terms of value were worth a total of US$4.56 billion, accounting for a 94.9-percent share of the overall deal value in the first quarter.
The biggest deal, and the only billion-dollar transaction, in the first quarter was the US$2.6-billion deal in which supermajor BP agreed to sell 20 percent of its 60-percent stake in a gas block in Oman. BP’s divestment is part of its plan to receive US$25 billion in divestment proceeds by 2025. After the completion of the sale of 20 percent in Oman’s Block 61 to Thailand’s PTT Exploration and Production Public Company Limited (PTTEP), expected this year, BP will remain operator of the block with a stake of 40 percent.
The second-largest deal in the Middle East and Africa was the US$926 million asset transaction in which another supermajor, Shell, signed an agreement with a consortium made up of subsidiaries of Cheiron Petroleum Corporation and Cairn Energy PLC to buy Shell’s upstream assets in Egypt’s Western Desert for a base consideration of US$646 million and additional payments of up to $280 million between 2021 and 2024, contingent on the oil price and the results of further exploration.
The deal “is consistent with Shell’s efforts to shift our Upstream portfolio to one that is more focused, resilient and competitive,” said Wael Sawan, Shell’s Upstream Director.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com