Guest essay by Eric Worrall
OilPrice.com reports that Private Equity firms and Japanese energy giants are ramping up to an unprecedented buying frenzy, snapping up shale assets in the USA and oil and gas assets worldwide.
Japan Is Aggressively Buying Up Oil And Gas Around The World
By Dave Forest – Nov 24, 2016, 2:51 PM CST
This coming year could be a surprisingly exciting time for oil and gas developers.
Yes, energy prices are depressed right now. But not everyone sees that as a negative. In fact, private equity funds are still raising record amounts of capital for energy investments — with managers and investors alike seeing the current downturn as a prime time to pick up good assets for cheap.
Most of that PE money is earmarked for U.S. shale. But this week’s announcements from Indonesia state oil firm Pertamina, and Japanese government arm Jogmec, show that the spending spree may now be extending to global oil and gas assets.
Pertamina had $700 million this year for acquisitions — and will likely have billions for the coming year. Jogmec is even more flush with cash — having arranged financial backing totaling $5.2 billion yearly for oil and gas M&A.
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The oil giants are keeping their cards close to their chest, but OilPrice speculates that aside from obvious shale investments in the USA, the target of most of energy investments are new fields in Africa, Latin America and Southern Russia.
So is this going to come as a leg-up for Trump’s putative coal industry rescue?
They’re smart, they know that it is currently undervalued.
I just locked in a propane price of just under $1.60/gal. for the next 12 months. Still can’t believe it.