Monthly Deal Round-up for September 2022 – Oil, Gas & Energy deals by Wesley Johnson
Europe’s frantic scramble to replenish its gas reserves following disruptions in the energy market as a result of Russia’s invasion of Ukraine has presented a golden opportunity for some African nations.
Historically Europe has imported around 62% of its gas supply from Russia with Africa chipping in with a steady average of about 18% over the past decade. As Europe desperately tries to wean itself off Russia’s supply, Africa has surfaced as a promising alternative and we are expected to see a drastic increase in exports from the continent in the upcoming years, according to Rystad Energy.
According to the IEA, Africa has the potential to replace as much as one-fifth of Russian gas exports to Europe by 2030, and resource-rich nations on the continent could see billions in investment in the upcoming years.
Early this year, the European Commission outlined its REPowerEU Plan to make Europe independent from Russian fossil fuels well before 2030 by accelerating renewable energy development and diversified gas supplies.
As a result of the above, this has triggered a plethora of new LNG supply partnerships being forged across Africa. Amongst the front runners include the likes of Senegal and Mozambique.
Germany for example has been working with Senegal since May this year to assist in the completion of the BP-led Greater Torture Ahmeyim LNG project. Furthermore, Germany has also expressed an interest in Senegal’s Teranga offshore gas field which is expected to recover 456.51 Mmboe, comprised of 2,739.07 Bcf of natural gas reserves.
Italy, one of Russia’s core clients has turned to the likes of Algeria, Libya, Egypt, Angola, Mozambique and Congo for alternatives. Although Italy already imports gas from Algeria, they had recently signed a deal to augment their imports by 9 million tons of LNG by 2024.
This much-welcomed capital boost for many African nations presents a valuable opportunity beyond the likes of economic prosperity and energy security.
African nations who are in high demand for their resources should see this as an opportunity not just for short-term financial gain, but for longevity by re-deploying some of their returns into developing renewable energy technologies to set themselves up for sustained success.
Furthermore, African nations should also look to capitalise on the Intellectual capital that these new partnerships can offer from the likes of leading technology nations like Germany.
One option that could potentially support the above is by including provisions within new partnership agreements that aim to mobilise either monetary or intellectual capital into the development of renewable technologies within the country. An example of this could be the inclusion of a local content policy that sets fair obligations for foreign investors to support the development of endogenous technology and infrastructure.
African nations that see this exciting opportunity as a long-term prospect will not only see benefits such as energy security and economic prosperity but will also organically find themselves in a position to join the world stage in our journey to achieve Net Zero.
Returning to the monthly deal round-up below, I have highlighted my top oil, gas and energy deals closed off for September.
Renewable Energy deals
- Brookfield to invest up to $2 billion in Scout Clean Energy and Standard Solar
Brookfield Renewable has agreed to acquire Scout Clean Energy (“Scout”) for $1 billion with the potential to invest an additional $350 million to support the business development activities ($270 million in total net to BEP). Furthermore, on the same day, Brookfield also announced the acquisition of Standard Solar for consideration of $540 million with the potential to invest an additional $160 million to support the business’ growth initiatives ($140 million in total net to BEP)
- Intersect Power closes $3.1 billion in project financing to complete near-term portfolio totalling 2.2GWDC
Intersect Power announced the closing of an aggregate of $2.4 billion of new financing commitments and the allocation of $675 million of previously announced commitments for the construction and operations of four solar energy projects totalling approximately 1.5GWdc PV + 1.0GWh BESS.
- Iberdrola sells 49% of Wikinger to EIP for $700 million
Iberdrola has signed an agreement with Energy Infrastructure Partners (EIP) for the sale of a 49% stake in Wikinger offshore wind farm in Germany. The transaction is valued at around €700 million, and Iberdrola will maintain a majority stake of 51%. The transaction further advances Iberdrola`s asset rotation plan to finance new renewable projects under development.
- Glennmont Partners 250-million-euro green credit fund
Clean energy fund manager Glennmont Partners has launched a 250 million euro ($241 million) green credit fund to invest in clean energy and infrastructure assets. Glennmont Partners raises long-term capital to invest in low-carbon power generation projects, such as wind, biomass, solar and small-scale hydropower plants.
- Shell makes their first African renewable energy deal by acquiring Daystar Power
Shell Plc’s renewable energy division has acquired Nigerian solar energy provider, Daystar Power in its first acquisition of a power firm on the continent. This acquisition comes as part of Shell’s efforts to reduce its Co2 emissions and focus on renewables. The takeover, which awaits regulatory approval, will enable Shell’s renewable and energy solutions business to deliver carbon emission reductions and power cost savings to commercial and industrial businesses across Africa, according to an emailed statement from Daystar.
- Enbridge acquires Tri Global Energy for $270 million to boost renewables platform
Enbridge has bought Tri Global Energy, a renewable power project developer for $270 million in cash and assumed debt. The company will also pay up to an additional US$50 million contingent on the successful execution of TGE’s project portfolio. TGE is the third largest onshore wind developer in the U.S. with a development portfolio of wind and solar projects representing more than seven gigawatts of renewable generation capacity.
- Amazon invests in another 71 renewable energy projects, totalling 2.7GW
Amazon has invested in another tranche of renewable energy projects as part of its aim to reach 100% renewable energy across its entire business by 2025. Their latest investments include renewable energy projects in South and North America, India, Poland, France and Germany.
Oil & Gas deals
- Repsol sells 25% of oil and gas unit to EIG for $4.8 billion
Repsol is selling a 25% stake in its oil and gas exploration division to U.S fund EIG for $4.8 billion to free up some capital and deploy it into renewable energy projects in support of a lower-carbon future. Its upstream business has set the strategic goal of reducing its carbon intensity by 75% by 2025.
- Shell and Exxon sell Aera to IKAV for $4 billion
Shell and Exxon Mobil had owned the California oil joint venture Aera. German asset manager, IKAV has acquired Aera for a sum of $4 billion. Exxon and Shell have moved out of mature energy properties at a time when gas and oil prices are directed towards new deals and opportunities.
- Sitio Royalties has agreed to acquire Bringam Minerals for $4.8 billion
The acquisition brings together two of the largest public companies in the oil and gas mineral and royalty sector and is expected to generate approximately $15 million of annual operational cash cost synergies and to reduce Sitio’s 2Q 2022 pro forma cash G&A per Boe by 19% to approximately $1.72 per Boe for the combined company.
- EQT agrees to acquire Tug Hills THQ Appalachia for $5.2 billion
EQT Corp, the largest natural gas producer in the US, has announced that it has agreed to acquire Quantum Energy and Tug Hill Operating-backed THQ Appalachia I LLC and associated pipeline infrastructure in a deal worth $5.2bn.
- Talos Energy has agreed to acquire EnVen Energy for $1.1 billion
Talos has acquired a plethora of energy companies, including Stone Energy to capitalise on higher oil prices. The acquisition of oil-weighted, deepwater assets, with significant infrastructure, is expected to increase Talos’ production capacity by 24,000 barrels of oil equivalent per day. It will also double the firm’s operated deep water facility footprint.
- Tamarack acquires Deltastream Energy for $1.1billion
The acquisition positions Tamarack as the largest Clearwater producer with considerable scale and upside across Nipisi, Canal, Marten Hills, Greater Peavine, Perryvale and Jarvie.