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Sunday, January 19, 2020

Increasing deal momentum signals improving energy market conditions

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KPMG’s specialist energy team, based in Aberdeen, has reported a rise in M&A activity, driven by greater diversification, a renewed focus on innovation and more optimism about mid to long-term prospects across the offshore energy sector. 

In recent weeks, the firm has advised on a number of significant energy deals, including the sale of Signum Technology to Trelleborg and GEV Group to Bridges Fund Management. The positive sentiment is welcome news for the industry as the supply chain continues to rebuild and look to the future, following a sustained downturn. 

The technology, skills and capabilities developed for the upstream oil and gas sector have significant value across a number of energy markets adjacent to the offshore upstream market such as renewables and the LNG market. Companies who have taken advantage of this adjacency to deploy these skills and enter new markets, alongside a continuing recovery in their core upstream markets have seen strong growth opportunities over the last 12-18 months. 

Robert Logue, Head of Energy Services M&A at KPMG, said: 

“We’ve definitely witnessed an upward shift in momentum recently, with much of that activity driven by a desire to diversify and the use of new technology/products to access new markets. Some established players are diversifying from the upstream oil and gas market, and moving towards renewables, while other new entrants are arriving, with a bigger focus on technology and innovation to drive down costs. 

“What is clear is that we’re still in a period of uncertainty with the current oil price environment and the current political and macro-economic climate. However, we have seen positive signs that the market is demonstrating a real sense of resilience and a determination to shape a new sustainable, long term future with companies who have a technically differentiated product or service seeing growth prospects across a number of energy end markets.” 

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