(Reuters) – Oil majors have put up for sale assets worth more than $300 billion and more could come as shareholders press for lower capital expenditure and higher dividends, according to a major private equity player investing in energy.
Marcel van Poecke, managing director at private equity giant Carlyle‘s CG.O fund International Energy Partners, which specialises on European downstream investments, told a conference he saw the biggest buyer’s market of his career as oil majors continue splitting oil production from refining.
“I’ve been in this business for 25-30 years. I’ve never seen the market with so many good assets for sale,” he told the FT Commodities Summit.
Earlier this year, Carlyle made a surprise foray into Europe’s struggling refining sector by teaming up with Swiss trading house Vitol VITOLV.UL to co-own refining, storage and distribution assets in Switzerland and Germany.
Van Poecke said he saw other private equity firms repeating such deals around the world as more majors will follow in the footsteps of U.S. firms ConocoPhillips COP.N, Murphy Oil MUR.N and Hess Corp HES.N, which have either spun off refining or are undergoing business restructuring.
“Investors say ‘We don’t need you to be an integrated company.’ … They say: ‘We can buy BP BP.L for upstream and Valero VLO.N for downstream. And we will create our own oil company’,” said Van Poecke.
Companies such as BP BP.L and Royal Dutch Shell RDSa.L have embarked on a capital diet after years of record spending on huge offshore or U.S. shale projects.
They are now promising to return more money to shareholders through dividends and share buy-backs.
BP is selling assets worth around $40 billion and Shell plans to sell some $15 billion worth of assets.
“It is the buyer’s market,” said Van Poecke.
(Reporting by Dmitry Zhdannikov; editing by Jason Neely)
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