M&A in Southeast Asia - 2022

(Originally published on December 30, 2022)

The past year has seen the continuing trend of the larger international oil and gas companies either leaving or looking to leave either countries or the region as a whole. Oil and Gas related M&A transaction value decreased to about a quarter of that seen in 2021.

Two key completions in H1 and one in H2

Two deals that were announced in 2021 were completed in Q1. Both of these saw majors exit countries, with the assets picked up by domestic companies.

• The first was the completion of Repsol’s sale of its Malaysian assets to Hibiscus Petroleum, this also included an associated asset in Vietnam. The sale of these assets will have a material impact on the emissions intensity for Repsol’s portfolio as well as providing some capital for energy transition investments.
• The second saw the completion of MedcoEnergi’s acquisition of ConocoPhillips Indonesian assets that included the Corridor PSC and the associated pipeline company. ConocoPhillips used this capital to pre-empt EIG at APLNG in Australia, which looks like a great decision.

H2 two saw the completion of Shell's exit from Malampaya in the Philippines, with Prime Infra the eventual buyer after delays owing to approvals.

2022 deals were generally small

The deals in 2022 have been limited, despite a number of interesting assets remaining on the market. The main deals for the year were:

• Owing to the political situation, TotalEnergies decided to exit Myanmar. Walking away from their Yadana stake and leaving it to the other existing partners. Chevron also stated that they would exit the country (Yadana asset) but would be looking to sell their stake rather than simply walking away.
• We have seen a new entrant offshore Thailand, with Valeura Energy picking up KrisEnergy’s assets and also acquiring Mubadala’s oil assets. It should make for an efficient portfolio and it will be interesting to see if it is a case of “getting the band back together” in terms of familiar faces from both Pearl Oil and KrisEnergy.
• Onshore Thailand, Dialog Oil & Gas entered the country by acquiring a Pan Orient subsidiary and, with it, their stake in the L53/48 concession that produces oil.
• The biggest deal in the region saw Shell divest from the fringes of their portfolio of assets offshore Sarawak. This saw the states oil company Petroleum Sarawak Exploration & Production (PSEP) take a non-operated stake in these producing assets.
• After their recent spending spree, MedcoEnergi have been under a bit of investor pressure to divest a few assets. December saw them announce the divestment of their 31.875% stake in Block 12W in Vietnam to BitExco. No deal value was announced and it is expected to complete in H1 2023.
• The final deal has seen Mitsui E&P exit the Bulu PSC, with new entrant Criterium Energy acquiring their stake. Mitsui picked up the aset as a part of their 2018 acquisition of AWE. The asset contains the Lengo field that has long had potential for development. However, getting it over the line has proved a challenge and before any development can happen the future of KrisEnergy’s 42.5% operated stake will need to be resolved. I would imagine that Keppel would hope to receive more than $1.6 million for this.