Latin America: 5 key takeaways from Sproule, DOB and EE M&A activity report

A new report from Sproule, the Daily Oil Bulletin and Evaluate Energy shows how politics and fluctuating oil prices continue to dominate headlines and influence appetite for investment in Latin America’s upstream oil and gas industry.

The full report is available to download at this link.

Five key takeaways

1. Government changes impact M&A appetite across the region

• Mexico’s change in government led to the suspension of licensing bid rounds and delayed farm-out arrangements;
• Brazil’s change in government has had less of an impact domestically, so far, on oil and gas development. The country continues to pursue offshore opportunities and create an onshore sector; and
• Argentina’s presidential elections are scheduled for October. The current administration made energy self-sufficiency a strategic goal and a new government may revert to a prior regulated domestic market structure.

2. Upstream M&A deal values dropped 64% in 2018 compared to 2017. 2019 also began slowly until a $1.3 billion deal was agreed in Brazil in April.

Source: Latin America: Assessing the impact of oil prices and the political climate on upstream M&A activity

3. Brazil remains the clear leader in terms of the value of M&A deals, while Colombia has seen the largest number of deals agreed.

4. Equinor (formerly Statoil) is the key driver behind deal activity in Brazil since 2014. The company has invested $5.3 billion in Brazilian asset acquisition since the latter half of 2016.

5. Canadian companies dominate in Colombia. Of the 73 M&A deals in Colombia between 2014-2018, more than 50% involved an acquiring company headquartered in Canada at the time of the deal.

Download the full M&A report from Sproule, the Daily Oil Bulletin and Evaluate Energy at this link.