Deloitte: Unconventional oil, gas investors watching US tax, fiscal policies

The oil and gas industry so far has avoided any drastic changes in US regulation or taxation, but the risk of change still exists, prompting unconventional asset buyers and sellers to monitor the direction of federal tax and fiscal policy, said the Deloitte yearend 2012 report on mergers and acquisitions.

“A disproportionate or extreme change in regulatory oversight or taxation could put at risk the energy renaissance that North America is experiencing,” said Roger Ihne, principal, Deloitte Consulting LLP.

“The shale gas revolution initially benefitted the oil and gas industry, and is now largely responsible for potentially hundreds of billions of dollars in investment slated over the next decade for midstream infrastructure, added petrochemical capacity, LNG export facilities, and other manufacturing-related capital outlays.”

Jason Spann, Deloitte Tax LLP partner, said political uncertainty might have contributed to slowed transaction activity last year.

“Some buyers and sells did push to get deals done, driven by the changes to the tax law,” Spann said. “A few people were incentivized to get deals completed in 2012 at more favorable tax rates.

Jim Dillavou, Deloitte & Touche LLP transaction partner, noted lingering uncertainty exists because US lawmakers face significant work on fiscal policy.

“For an investor, the uncertainty has an impact on transactions and how much they are willing to pay,” Dillavou said. “The uncertainty makes it more difficult for buyers and sellers to reach an agreement on pricing.”

Unconventional play interest

Interest in US and Canadian assets supported the upstream transaction market last year, Deloitte said. The total value for upstream M&A rose 50% to $253.4 billion last year even as the number of 2012 transactions declined to 461 compared with 518 in 2011.

The upsurge in 2012 activity came late in the year, driven by Rosneft’s acquisition of TNK-BP (OGJ Online, Oct. 29, 2012).

National oil companies showed continuing interest in US and Canadian assets. CNOOC Ltd. is working to close its $15.1 billion acquisition of Nexen Inc.

All requisite approvals have been received. That includes approvals from Canada, UK, US, European Union, and China (OGJ Online, Feb. 12, 2012).

“We continue to see strong interest from foreign buyers, including state-owned enterprises,” Dillavou said. “Those companies are getting involved in North America’s oil and gas markets in order to better understand shale and tight oil resources.”

Many investments by NOCs in North America have been through noncontrolling interests in joint ventures. Deloitte expects to see continuing interest from international companies in their quest for North American and South American properties.

“Continued low US natural gas prices may only fuel buying interest as those with the deepest pockets recognize a long-term bargain when they see it,” Deloitte’s report concluded.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts


Driving Growth and Efficiency with Deep Insights into Operational Data

When Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST



On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected