Brian Thumath, Partner and corporate finance specialist at Pinsent Masons, looks at the firm’s major transactions from last year and explains how energy played a leading role.
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Pinsent Masons Aberdeen led on a wide range of transactions with a strong energy sector focus in 2023 and our Queen’s Road office remains at the heart of the firm’s energy transactions offering in Scotland and internationally. We were delighted to work on some of the largest locally relevant deals, delivering multiple high value public and private M&A and joint venture transactions, demonstrating our expertise and specialism across the Energy sector.
Energy transition is at the core of our Energy team’s transaction activity, and we continue to act for market participants across the transition spectrum. We remain fully committed to our Energy clients and continue to act for upstream oil and gas companies on their strategic UK and international M&A, whether that be supermajors like TotalEnergies; large integrated Energy businesses such as Suncor Energy; or leading UK independent operators such as Ithaca Energy and Jersey Oil and Gas.
In the last 12 months our oil and gas M&A team have been busy working on some of the most important deals affecting the UKCS. Our Aberdeen specialists were at the centre of Suncor’s $850m sale of its UK exploration and production business to Equinor and Prax Group’s £249m acquisition of Hurricane Energy.
Oil and gas will continue to play a fundamental role in the economic and strategic future of the UK, and it is right that this continues to be a core focus of our local expertise – expertise that can be exported from Aberdeen to service clients and deployed in transactions all over the world.
From a renewables M&A perspective, during 2023 we acted for players across all forms of Energy generation technologies – from offshore and onshore wind, solar, anaerobic digestion to storage including pumped hydro storage and battery.
We were pleased to have acted on our second large-scale Scottish pumped storage hydro M&A transaction in recent years when we represented Statkraft on their acquisition of the 450MW Red John project from ILI. We continued to work on strategic clean tech M&A for clients such as EDF Renewables, TotalEnergies, and Boralex, as well as assisting with the set up of new platforms for investment in the European market, such as the establishment of Ampyr Distributed Energy, a joint venture between AGP and OME Capital.
From an Energy service company perspective, as transition continues apace and with further M&A expected in the Energy supply chain, we continued to act for companies who are looking to achieve their pivot to servicing a broader spectrum of Energy clients through high value joint ventures, and inorganic growth through acquisitions.
Undoubtedly, one of the most significant energy services transactions in recent years was the creation of OneSubsea. Hailed as a “turning point for the industry” Aker Solutions, SLB and Subsea7’s $3.5 billion joint venture has created one of the world’s leading subsea solutions and technology providers – and we were delighted to have acted on UK and international aspects of this transaction alongside other lead firms.
We also acted alongside the local Aberdeen corporate finance community on the sale of Praxis Completion Technologies to WellBoss. It was fantastic to see all parties on the buy and sell-side on this Middle East focussed deal with a US buyer represented by Aberdeen based advisors. This “local team, international deal” is a theme that we are seeing repeated and is an area where we feel there are real opportunities in 2024.
We export our local corporate and commercial energy expertise in Aberdeen to other parts of the Pinsent Masons 26-office network to service deals across the energy sector. Moreover, we can draw on the international expertise of our other offices to help deliver for local businesses in Aberdeen who have an increasingly international outlook, and we see this as a real differentiator for our business.
In 2023 our Aberdeen office transaction team worked on deals in the UK, Norway, Spain, the Netherlands, Taiwan, Tanzania, Guyana, Egypt, Dubai, Saudi Arabia, Singapore and Australia to name a few. This ability to service international deals using local expertise will be crucial to future success.
But what themes have we seen develop throughout 2023 and what might 2024 have in store for the local M&A community?
- Continued success of the local advisory community exporting their M&A capability to work on international transactions, recognising Aberdeen not just as a local market but a centre of excellence for the export of advisory experience and skills to international markets. This reflects a wider trend of Aberdeen service businesses using a “hub and spoke” model to access new service lines and geographies.
- Continued deployment of Middle Eastern investment capital in oil and gas and Energy services businesses, capitalising on the continued appetite for investment in oil and gas in the Middle East and Africa, and no doubt leading to a strong Aberdeen representation at ADIPEC 2024.
- Continued facilitation of Energy services transition through acquisitions. As the requirement to service a broader constituent of Energy clients, traditional services business will diversify through acquisition rather than through organic growth, and we consider there will be a spate of transactions in 2024 in the oil and gas services market focussed on oil and gas fundamentals with an eye on Energy transition opportunities.
- An uncertain UK political environment with regard to continued oil and gas investment, with likely an incumbent UK government needing to clarify their position to drive continued investment in the sector, as well as the need to ensure that the next CFD Round for offshore wind AR6 delivers meaningful subsidies for future projects.
- Continued large scale upstream oil and gas M&A transactions in the first half of 2024, as oil majors and other larger producers look to improve their overall asset duration, inventory and production economics.
2023 team deal highlights
Pinsent Masons’ Aberdeen Energy and Corporate team deal highlights for 2023 included advising:
- Suncor Energy on the $850m sale of its UK exploration and production business to Equinor.
- Prax Group on the £249m acquisition of AIM-listed Hurricane Energy.
- TotalEnergies on acquisition of 50% stake in Tiawan offshore wind project.
- AIM-listed Jersey Oil and Gas on the sale of 50% interest in Greater Buchan Area in UKCS to NEO Energy and a sale of 30% to Serica.
- Aker Solutions as UK counsel in its $3.5bn joint venture with Schlumberger and Subsea 7.
- EDF Energy Renewables on auction sale process of 100% rights to three Scottish onshore wind projects and on its acquisition of Solar Advanced Systems and The Ethical Renewable Company
- Scirocco Energy on sale of 25% interest in Ruvuma oil and gas field onshore Tanzania.
- Dubai-based Praxis Completion Technology on its sale to US-based WellBoss Company.
- Tullow Oil on disposal of Dutch subsidiary holding interests in Orinduik field Guyana.
- Singapore-based AGP Sustainable Real Assets on launch of AMPYR Distributed Energy.
- Scirocco Energy on sale of investment in Energy Acquisitions Group to OrbeNovo Capital.
