Bracewell’s Darren Spalding and Adam Blythe collaborated with Energy Voice to produce a piece on trends to watch for in African M&A in 2024.
While a consistently high oil price environment created favorable market conditions for deals in 2023, transactions across Africa faced headwinds. Even though there were numerous sale processes, not all progressed to signing. Of those deals that did, an even smaller subset proceeded to completion.
Nevertheless, given the lack of global investment in upstream exploration and development in recent years, M&A remains an important means for oil and gas companies to access new reserves and opportunities, despite the challenges.
Each jurisdiction is subject to its own political, economic and legal landscape, but there are a number of consistent themes:
- Governments flexing their muscles
- Test of new regimes
- Constrained capital for smaller players
- “Clean break” and “exit taxes”
- Portfolio re-balance for majors
- Changing buyer universe
- Active NOCs
- Economic climate in China impacting its investment and participation
- Extended deal timetables
- Importance of stable oil price