The North Sea Transition Authority (NSTA) has published new guidance designed to smooth and accelerate merger and acquisition (M&A) deals between companies operating in the North Sea.
Aimed at enabling “transactions that are hampered with delays or reach
an impasse”, the guidance on M&A deals connected with the assignment of offshore petroleum production licences in the UK Continental Shelf provides “recommended principles and practices” designed to encourage buyers, sellers and interested third parties to work together to ensure that transactions go through quickly.
The regulator is acting because it believes the acquisition and disposal of licence interests bring “new capital, new ideas and new vigour” to the North Sea.
By ensuring the “right assets are in the right hands”, NSTA says this will not only secure the “maximum value of economically recoverable petroleum” but will also help meet net zero targets.
There are currently more than 100 transactions per year on the North Sea ranging from multi-million-pound transfers of field ownerships to smaller changes of joint venture (JV) partners.
The guidance addresses the role each can play in helping these deals proceed efficiently.
NSTA director of regulation Jane de Lozey said: “The energy transition requires significant investment as well as collaborative working between the many companies operating in the North Sea. This guidance will assist that important process.”
An NSTA spokesperson told Energy Voice that the guidance was published following an earlier consultation exercise.
“The guidance is intended to be used for any and all assignments on the North Sea and the desire is that they go through as quickly as possible without unnecessary delay,” Belgard said.
Some existing infrastructure, including depleted reservoirs and pipelines, will be repurposed for carbon storage – which may require transactions, he added.
“Matters of co-location, where oil and gas, offshore wind and carbon storage need to share space need to be agreed,” he said.
Recommendations in the guidance suggest that parties create a “capability pack” containing key corporate and financial information to reach joint venture decisions; a “single point of contact” referring to a single individual in both buyer and seller companies with responsibility for communications; agreed timelines with milestones; candid, open, constructive negotiations; and proportionate security arrangements to meet decom liabilities.
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