MedcoEnergi is closing in on some of Australia’s largest oil and gas assets, with the Indonesian group understood to be in the later stages of the contest to buy energy projects from Italy’s Eni, worth up to $1bn.
The company has also been circling the $US2.5bn ($3.4bn) Gippsland Basin assets in the Bass Strait on offer by ExxonMobil while being ushered through to the second round of the Eni competition run by investment bank Citi.
Also believed to have made it through to the second round is the Macquarie and Neptune Energy partnership.
Beach Energy was known to be a contender and Morgan Stanley Infrastructure Partners is also thought to be an eager buyer so the thinking is that they are also in the final stages.
Barclays is understood to be representing an Indonesian suitor but it is not believed to be MedicoEnergi.
On offer by Eni as part of Project Ocean is a 10.99 per cent stake in Darwin LNG. Analysts estimate it is worth about $250m.
Also for sale is the Bayu-Undan gas field project to which it is linked. The Blacktip gas field project and the Yelcherr gas plant connected to the project are also for sale and expected to fetch up to $500m.
Eni is also selling a 72.2 per cent interest in the Evans Shoal and Barossa gas field project off the coast of Darwin.
The challenge for any party will be extracting earnings growth and a successful buyer will need approval from the Northern Territory government which has suffered in the past from companies being unable to pay up for remediation that is needed on projects.
While an infrastructure investor would need an operator to buy the Eni assets on the face of it, one way around this for a group such as Morgan Stanley Infrastructure is to include a management buyout.
It was a similar move taken by Macquarie and Brookfield when they purchased West Australian oil and gas assets from Apache for $US2.1bn including debt before selling off parts of the business to other investors, including Wesfarmers.
That business, renamed Quadrant, was sold in 2018 to Santos for $2.15bn.
Macquarie had owned 36.3 per cent of the WA oil and gas company, while Brookfield had 48 per cent, Wesfarmers 13.7 per cent and management the remainder.
The Macquarie unit involved is headed by husband and wife team Robert Dunlop (chairman of the bank’s global resources group) and Kate Vidgen (executive director specialising in energy).
Macquarie is also believed to be planning to compete for Exxon’s Bass Strait assets, for which Beach Energy is also known to be keen.
This is after it purchased the Lattice Energy portfolio from Origin Energy in 2017 for $1.59bn, changing the company from a junior to a $4bn business.
Why an ex-hardware retailer was picked to chair Lendlease
Former Bunnings boss John Gillam is an interesting choice as chairman for one of Australia’s most recognised real estate groups.
Incitec fertiliser unit back in BGH’s crosshairs
As BGH Capital continues to eye up acquisition opportunities, one of the more interesting targets it has turned its attention back to is understood to be the fertiliser unit of Incitec Pivot.