MArket analysis

Deals in brief

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Santos to sell 25% stake in Darwin LNG and Bayu-Undan for $390m

Australian energy firm Santos has agreed a $390m deal to sell assets to South Korean energy group SK E&S. Santos will sell a 25% stake in the Darwin LNG facility and the Bayu-Undan gas field, offshore Northern Australia.

The deal was made in October 2019, but was announced on Thursday. It is conditional on the purchase of  ConocoPhillips’ Australia-West assets and operations for $1.39bn, announced in October last year. The deal is also subject to other third-party consents and regulatory approvals, as well as a final investment decision on the Barossa development project.

Santos will receive around $120m of cash flow from the interests, from 1 January 2019 to 1 October 2019.

Santos managing director and CEO Kevin Gallagher said: “Santos continues to build alignment between the Darwin LNG and Barossa joint ventures through discussions with Darwin LNG participants and others to acquire equity in Barossa.

“We are in advanced discussions to sell-down equity in Barossa to a target ownership of around 40% to achieve increased partner alignment.”

SK E&S already owns a 37.5% interest in the Barossa offshore development project that will backfill Darwin LNG.

Gallagher added: “Santos expects to take a final investment decision for the development of Barossa following completion of the ConocoPhillips acquisition and once all necessary technical, engineering and commercial contracts are in place, including the processing agreement with Darwin LNG, to allow the project to proceed subject to market conditions.”

Credit Suisse (Australia) and JB North act as financial advisors while Allens is the legal advisor to Santos for the transaction.

Earlier this month, ConocoPhillips awarded a contract to engineering firm Subsea 7 for the barossa project. The wngineerign company will supply the Barossa project with infield flowlines and subsea umbilicals, risers and flowlines (SURF) infrastructure.

Mubadala subsidiary MP G1 to increase Manora oil field stake to 70%

Thailand-based Mubadala Petroleum subsidiary MP G1 is set to increase its stake in G1/48 Manora block in the Gulf of Thailand.

Northern Gulf Petroleum, an oil and gas exploration and production services firm, has agreed to transfer its 10% stake in the G1/48 Manora block to MP G1 (Thailand).

OMV in talks with Mubadala for $4.68bn controlling stake in Borealis

Austrian oil and gas company OMV has announced it is negotiating with joint venture partner Mubadala for an additional stake in petrochemicals firm Borealis.

OMV said it intends to buy an additional 39% share for $4.68bn. If completed, OMV’s current shareholding in Borealis would increase from 36% to 75%. UAE-based Mubadala would hold the rest of the equity.

Equinor and Shell sign MoU for digital collaboration

Equinor and Shell have signed a memorandum of understanding (MoU) to collaborate on digital solutions.

The partnership aims to use joint experience in areas such as data science, artificial intelligence (AI) and 3D printing.

In a statement, Equinor said the collaboration could involve innovation across maintenance, production optimisation, and supply chain management (SCM). The scope of the agreement will be further detailed later, on a project-by-project basis.

Aquaterra Group acquires Subsea Engineering and Technical Services

Engineering company Aquaterra Group has announced its acquisition of Subsea Engineering and Technical Services (SETS).

The acquisition was signed on 7 February but was announced on Monday. Both companies work in subsea and offshore construction, wth both operating from Aberdeen, UK.

Energy services firm Hunting acquires Enpro Subsea

UK-based energy services group Hunting has acquired production optimisation specialist Enpro Subsea for $33m in cash from members of the Enpro management team and Energy Ventures (EV) Private Equity.

The deal value also includes a potential maximum earn-out of $3m, based on earnings before interest, tax, depreciation and amortization (EBITDA) performance this year.