While media attention for unconventional U.S. energy sources such as shale may have died down this year, Deloitte’s ‘Oil & Gas Mergers and Acquisitions Report for Mid-Year 2010’ reminds us that M&A interest remains very strong.
There have been six deals targeting unconventional U.S. reserves this year so far, worth a whopping $52 billion.
The majority of interest is focused on the U.S. Northeast and its Marcellus shale boom, with substantial interest coming from abroad:
“Less than a decade ago, the onshore North American exploration and production business looked like it was in permanent decline. Now it’s powering oil industry M&A. Buyers from around the world – France, Korea, India and the UK to name a few – are seeking to acquire the expertise to go after unconventional reserves,” Deloitte said in its report.
Deloitte’s research indicates that the strongest buying interest is from China, where national oil companies and other firms are looking to invest their large reserves of U.S. currency, formerly invested in Treasuries and other liquid investments, into U.S. natural resources.
Chinese and Indian companies have mostly been buying minority stakes, which has given them entry into the U.S. market without many of the management and political issues associated with having a controlling interest.