Saturday 22 October 2016

Tullow eyed by French rival as slump prompts deal talk

Dinesh Nair, Francois de Beaupuy and Angelina Rascouet

Published 16/12/2015 | 02:30

Tullow Oil facility in Uganda
Tullow Oil facility in Uganda

French oil explorer Etablissements Maurel & Prom SA has reached out to potential buyers in a fresh attempt to find a partner as oil prices trade near the lowest level in six years, according to people familiar with the matter.

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Maurel has informally contacted competitors including Tullow Oil and Ophir Energy to discuss potential combinations that would allow it to cut costs and gain scale in a weak market, the people said, asking not to be identified as the information is private. There is no guarantee that a deal will be agreed and Maurel may decide to stay independent, the people said.

Representatives for Maurel, Tullow and Ophir declined to comment yesterday. "Everyone is talking with everyone," Maurel CEO Jean-Francois Henin said in August, citing industry consolidation amid the drop in prices. Separately, Maurel yesterday raised its offer for Nigeria-focused explorer MPI as it tries to bolster its financial position and lower costs and taxes.

Independent oil explorers have seen their stock prices collapse this year as investors doubt their ability to withstand the decline in oil prices. Maurel's shares have declined more than 65pc in 2015. On Monday, oil fell below $35 a barrel in New York for the first time since 2009 as Iran reiterated a pledge to boost crude exports, indicating the oversupply issues that have been driving down prices will continue.

Ophir, a UK oil and gas explorer active in Africa, has received informal takeover interest from several parties after its share price dropped more than 40pc this year, sources said last month.

Genel Energy is in merger talks with New Age African Global Energy. (Bloomberg)

Irish Independent

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