Drilling on Wall Street
Italian oil and gas company Eni S.p.a. announced that Burren Energy, a UK-based gas and oil company, has accepted its buyout offer. The deal is worth $3.6 billion.
The two companies were already partners in a Congolese oil field.
Burren runs oilfields in Turkmenistan and own a fleet of tankers. It has a presence in India and Egypt as well.
Eni is a wide-ranging energy company with an electric utility (EniPower), oil field and engineering services (Saipem and Snamprogetti), petrochemicals (America Agip and Polimeri Europa), exploration (Eni Lasmo), and natural gas transmission (Italgas and Snam Rete Gas).
Eni reportedly beta out the Korea National Oil Corporation (KNOC) as well as several others.
Eni is pushing for acquisitions, having spent $9.5 billion this year to acquire oil fields in the Gulf of Mexico, Angola, the Congo, and Russia over the last year. This is in part to make up for declining production on older oilfields and partly because of political problems in other countries (including Nigeria and Kazakhstan).
This kind of consolidation keeps happening. One reason, according to an Ernst & Young report, is that many oil exploration companies are cash short, while companies who sell oil are now awash in cash. One big factor that may drive up prices for acquiring oil companies: Venezuela and Iran's state oil companies have just entered an alliance and plan to buy up drilling rights and oil fields around the world - and both have plenty of cash.
