Page 12 - LatAmOil Week 42

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Mideast: Opportunity knocks in Saudi and several large deals have followed suit.
Companies have resumed bidding for work Now all eyes have turned to the shale patch,
under Saudi Aramco’s giant unconventional gas where ConocoPhillips has confirmed its acquisi-
development plan after a hiatus caused by the tion of Concho Resources. Meanwhile, separate
coronavirus (COVID-19) pandemic. The state reports have emerged of talks over a potential
oil firm is planning to spend $110bn to develop tie-up between Pioneer Natural Resources and
the onshore Jafurah gas field located in the pro- Parsley Energy.
lific Eastern Province, and four engineering, News of the ConocoPhillips-Concho deal
procurement and construction (EPC) firms are first emerged last week, and were confirmed in
understood to have submitted bids for a major a press release on October 19. Like a number
package. of recent mergers, it is an all-stock transaction,
In Saudi Arabia, Aramco’s long-term agree- illustrating producers’ unwillingness to spend
ments (LTAs) reign supreme, with signatories money under current market conditions. The
receiving near-exclusive access to tenders for transaction is valued at $9.7bn, and represents
hydrocarbon development work. While work to a 15% premium to the companies’ closing share
expand production from the supergiant Berri, prices on October 13, with Concho investors
Marjan and Zuluf oilfields is understood to have standing to receive 1.46 shares of ConocoPhillips The Permian
been put on hold, Aramco has ring-fenced Jafu- stock for each of their own.
rah as a project of strategic importance to the For ConocoPhillips, which has both conven- seems to be
Kingdom, which is keen to ramp up gas output. tional and unconventional operations, this deal one of the main
When the field reaches its production plateau in will bolster its shale holdings, transforming its
2036, it is anticipated to yield 2.2bn cubic feet per position in the prolific Permian Basin. regions where
day of sales gas and 550,000 barrels per day (bpd) Unsurprisingly, the Permian seems to be one
of NGLs and condensates. of the main regions where consolidation is cur- consolidation
Across the border in the UAE, ADNOC has rently playing out. The acquisition of Noble also
stayed in the headlines by continuing its efforts bolstered Chevron’s position in the Permian’s is currently
to exert greater control over the full hydrocarbon Delaware sub-basin, while the merger between playing out
value chain. Over the last month, the company Devon Energy and WPX Energy, announced in
has set up two new trading arms, bought crude late September, is also underpinned by a position
carriers and divested further from its gas pipe- in the core of the Delaware.
line subsidiary. The moves are not only keeping And indeed, if the talks that are reportedly
ADNOC’s name in the headlines, but the firm is underway between Pioneer and Parsley lead to
leading from the front as other Gulf NOCs seek a deal, this would be entirely Permian-focused.
to monetise assets to free up cash amid uncer- Such a deal would create a major Permian player
tainty about oil prices and demand. with about $10bn in combined revenues and
production of more than 550,000 barrels of oil
If you’d like to read more about the key events shaping equivalent per day (boepd). Sources familiar
the Middle East’s oil and gas sector then please click with the matter have been quoted by outlets
here for NewsBase’s MEOG Monitor. including the Wall Street Journal and the Finan-
cial Times as saying an agreement could be
North America: M&A activity accelerates reached within weeks.
After a lacklustre start to the year, M&As are
picking up in North America. This started If you’d like to read more about the key events shaping
with Chevron’s move to acquire Noble Energy, the North American oil and gas sector then please click
announced this summer and recently completed, here for NewsBase’s NorthAmOil Monitor.™

P12 www. NEWSBASE .com Week 42 22•October•2020