The consolidation trend among engineering and energy service companies has picked up momentum, highlighted by a deal involving two French firms. Coflexip Stena Offshore Group SA's board has recommended that its stakeholders tender their shares to Technip SA, which has revised its takeover offer for the company.
Other engineering and service companies have recently announced consolidations:
- Saipem SPA, a unit of ENI SPA, said late last month it has acquired Moss Maritime AS, a Norwegian engineering company, for $55 million and has purchased Petro-Marine Engineering Inc., New Orleans, for $10 million.
- Weatherford International Inc., Houston, acquired Aberdeen-based Brit Bit Ltd., a manufacturer and supplier of technologies for drilling and completions.
- Dutch construction company Royal Volker Wessels Stevin NV (RVWS), agreed to become a 40% partner in Petroplus Engineering, a unit of Petroplus International NV, Amsterdam. Petroplus's focus is on the European midstream oil market.
- Flint Energy Services Ltd., Edmonton, Alta., has acquired Kilgore-based Chaparral Equipment & Services Co. Inc., a supplier and service provider for lease services, site construction, and gas processing equipment.
In other company news, Anadarko Petroleum Corp., Houston, divested its Guatemala operations with the sale of its wholly owned subsidiary, Basic Resources International, to Perenco PLC for $120.5 million.
Meanwhile, Duke Energy Field Services, Denver, increased its holdings in natural gas gathering, transport, and processing operations in the Gulf of Mexico.
Technip, Coflexip takeover
Technip recently revised its original offer for Coflexip, made July 3, boosting the deal's value to $2.8 billion (3.3 billion euro).
The principal exchange offer remains 9 Technip shares for 8 Coflexip shares, but the alternative cash offer, limited to 5 million Coflexip shares, was improved to 199 euros/Coflexip share, up from 193 euros.
Coflexip said an agreement reached between the companies "ensures that the combination will be achieved on a friendly basis, which is indispensable in project management work."
After the closing of the offer, the group will be composed of three branches: offshore, onshore and downstream, and nonpetroleum industries.
Coflexip and Technip said the combined group would focus on strong growth in the offshore market and expects a 50:50 revenue breakdown between offshore activities and other activities.
"Special attention will be given to the strong growth of investments in onshore developments, gas, and gas-related industries, particularly in the Mideast," said Coflexip. It will also seek to increase the share of its activity in the nonpetroleum sector to 15-20% of revenues.
Technip already owns 29.7% of Coflexip, and it will acquire another 17% once its anticipated takeover of the Isis holding company closes on Aug. 28. Technip and Coflexip formed a strategic alliance in the offshore oil construction sector in 2000.
Isis' board of directors unanimously recommended that shareholders accept Technip's revised share exchange offer for Isis, with a new exchange ratio of 11 Technip shares for 10 Isis shares. The original offer had been at the ratio of 12 Technip shares for 11 Isis shares.
Isis owns stakes in several companies, including Technip and Coflexip.
Saipem acquisitions
Saipem said the acquisitions enhance its ability to offer integrated engineering, procurement, construction, and installation services to the offshore oil and gas industry.
Moss Maritime designs floating oil production and process systems, liquefied natural gas carriers, and semisubmersible drilling units. The acquisition strengthens Saipem's capabilities in floating production systems and deepwater dry completion technology.
The Moss Maritime acquisition remains subject to Norwegian regulatory approval.
Weatherford buy
Weatherford said the Brit Bit acquisition includes a research and development facility in Aberdeen and a manufacturing facility in Arbroath.
The deal compliments Weatherford's expandable, multilateral, liner, and cementation product lines. Operations will be integrated into Weatherford's drilling and intervention services division.
Brit Bit technologies include polycrystalline diamond compact bits and a reamer shoe, which is a stabilized casing shoe designed to overcome various difficulties encountered in running casing.
RVWS-Petroplus deal
RVWS and Petroplus are working out details of their agreement, and they plan to sign a contract in the third quarter.
Petroplus Engineering provides engineering and construction services throughout Europe, mainly in the petrochemical industry. It had sought a specialized engineering partner to ensure its continued growth.
"The partnership with Petroplus Engineering is an important step to achieve our objectives," said Andries de Jong, executive vice-president of RVWS. "We are already active in the petrochemical sector, and this alliance allows us to further expand our activities."
Flint Energy-Chaparral deal
Flint Energy expanded its US presence with the Chaparral Equipment acquisition, which became effective July 6.
Flint Energy Chairman and CEO Brian F. Butlin said, "The addition of Chaparral will be a strong asset to Flint, and this is a significant step forward in strengthening our corporate presence in the US market."
Chaparral Equipment was founded more than 20 years ago and has 300 employees.
Flint Energy, established in 1998, is a private, integrated, construction and maintenance company. It employs more than 4,000 people in 49 regional operating facilities in western Canada and strategic service locations in the US.
Anadarko-Perenco deal
Anadarko had acquired Basic Resources as part of a merger with Union Pacific Resources Group Inc., Ft. Worth, in July 2000.
Basic Resources operates and controls 100% of an infrastructure that extends from the wellhead to the export terminal. This includes oil processing plants, a 295-mile pipeline system, an asphalt refinery, and storage and loading facilities at the Piedras Negras shipping terminal on the Caribbean coast. At yearend 2000, Basic had proved and probable reserves of 58 million bbl of oil.
Perenco is a privately held, European exploration and production company with operations in eight countries. Following its acquisition of these Guatemalan interests, Perenco will report net production of 100,000 bo/d.
Duke Energy purchase
Duke Energy bought the former MCN Investment Corp.'s ownership interest in natural gas gathering, transportation, and processing facilities off Louisiana, Mississippi, and Alabama
Terms of the deal were not disclosed. Duke Energy Field Services is a joint venture between Duke Energy Corp., Charlotte, NC, and Phillips Petroleum Co.
Duke Energy Field Services boosted its holdings in Dauphin Island Gathering Partners (DIGP) to 71.8% from 37.3% previously. That same deal also increased the joint venture's interests in Mobile Bay Processing Partners (MBPP) to 57.6% from 28.8% and in Gulf Coast NGL Pipeline LLC to 57.9% from 28.9%.
The acquisition closed July 11, making Duke Energy Field Services the owner and managing partner of DIGP and MBPP and the managing member of Gulf Coast NGL, executives said.
Natural gas is delivered to interstate natural gas pipelines that serve growing markets throughout the northeastern and southeastern US. Natural gas liquids extracted from the gas stream at MBPP's Coden, Ala., facility are transported to Louisiana fractionation facilities via pipelines partially owned by Gulf Coast NGL.
"The eastern gulf will be a critical natural gas supply basin for the growing Southeast area power plant markets in Florida, Alabama, and Georgia," said Mark Borer, senior vice-president of Duke Energy Field Services.
MCN Investment merged in May with DTE Energy, a Detroit-based diversified energy company that decided to divest those noncore assets.