M&A in Southeast Asia - 2023 Q1

The first quarter of 2023 has seen a slow but consistent deal-flow in the region, but limited in terms of scale. The theme of majors exiting the region has continued, with this quarter seeing a deal announced that will see Chevron exit Myanmar.

The chart below summarises the deals announced in the quarter:

It should be noted that there are a number of deals where no value was announced. Where this is the case, the deal has no value in the chart above.

Completion of previously announced deals

Two deals that were announced in 2022 were completed in Q1. Both seeing international players divest to either local players or regional governments.

• In mid-March, Shell announced the completion of its sale of two assets (Baram Delta EOR PSC / SK-307) on the fringes of its Sarawak portfolio to Petroleum Sarawak Exploration & Production (PSEP). The deal had been announced in mid-December, making it three months to complete.
• Last week, Valeura Energy?announced the completion of the acquisition of?Mubadala’s oil assets offshore Thailand. The deal had been announced in December, making it about three and a half months to complete.

This leaves a single deal that is still to close, namely BitExco's acquisition of MedcoEnergi's stake in Block 12W in Vietnam. I have not heard any expectation that this won't close.

New deals announced in Q1 2023

There have been five deals announced this quarter, including one HOA.

• The first deal, and one that snuck under my radar a little. It was announced in early-January and saw Matahio Energy acquire Tamarind Resources 78.8% interest in SC 14C-1 in the Philippines. The Galoc field sits within this service contract, with the deal also including the ownership of the FPSO that is currently servicing this field. From what I can see, there is plenty of personnel crossover from Tamarind to Matahio. No deal value was announced and I believe the announcement also signaled completion.
• The next deal, in mid-January, saw Jadestone Energy acquire MedcoEnergi's onshore Thailand assets. Completion was announced in the second half of February.
• The next deal is one that snuck under everyone's radar, with the earliest reference being the in UK's Guardian newspaper in early-February. The deal sees MTI Energy acquire Chevron's 41.1% stake (assuming the TotalEnergies stake was distributed between the partners) in the Yadana asset in Myanmar. There is some controversy here given the political situation. Very little detail has been provided but I assume it is yet-to-close.
• The next "deal" is the HOA that was signed between PETRONAS Carigali and SMJSB (the Sabah State Oil Co) for the latter to acquire a 50% interest in the Samarang PSC offshore Sabah. This follows the trend of the state oil companies (of Sarawak and Sabah) slowly taking a direct interest in the oil and gas industry. I have not included this in the formal analysis as this is only an HOA at this point.
• The final deal announced in the quarter saw Valeura Energy acquire the remaining 12.5% interest of the local special purpose vehicle (SPV) that was set up to facilitate the Mubadala deal mentioned above. The deal was all-share and now sees the SPV become a 100% subsidiary of Valeura.

Exploration awards

I wouldn't normally look at exploration awards, but we have seen some very positive trends already in 2023, with Indonesia, Malaysia and Thailand all having success through bid rounds.

• Indonesia: awarded three exploration blocks in February, namely Bunga, Peri Mahakam and Sangkar. Bunga was awarded to a consortium of POSCO International and Pertamina Hulu Energi, POSCO's first block in Indonesia. Peri Mahakam was awarded to a consortium of Eni and Pertamina Hulu Energi, strengthening Eni's position in the Kutei basin. Sangkar was awarded to Saka Energi, with the acreage being adjacent to their existing Pangkah?block.
• Malaysia: saw 9 block awards announced in February, from an offered 14 blocks, as a part of their 2022 bid round. A number of companies saw awards including PTTEP, INPEX, PETROS, EPMV, Skye UMDP Exploration, Longboat Energy, Topaz Number One and SMJ Sdn Bhd.
• Thailand: finally held an offshore bidding round, with the 24th bidding round seeing the award of blocks G1/65 and G3/65 to PTTEP, and Block G2/65 to Chevron.

Hope for Vietnam?

As I highlighted in the Vietnam post, the country's oil and gas business has been in stagnation for a number of years. However, we have seen the first signs of some positive news.

Just last week, it was announced that Vietnam will be introducing a new law, to come into force in July 2023. The law is reported to introduce fiscal incentives for frontier exploration and marginal field developments, both of which have been introduced elsewhere in the region with positive impacts, plus a reduction of the regulatory burden.

Assets on the market

I have been keeping track of the assets on the market, with these summarised in the table below:

If you have any questions on any of these opportunities then please drop me a DM.

Corrections / errors

As always, if there is anything I have missed or if you have any questions, then drop me a DM, thanks. :)