The North Sea will see a rise in infrastructure deals this year, according to business advisory firm Deloitte.
Against the backdrop of a low oil price more oil and gas companies are looking to divest non-core assets in the UK Continental Shelf, says the firm, with private equity and specialist infrastructure funds likely purchasers.
Deloitte’s latest European Infrastructure Investors survey found that pipelines, in particular, have provided a solid and steady return over the last five years and revealed that this asset class will remain a “strong focus” for infrastructure investors in the future.
“The ownership model has evolved, driven by the maturity of the basin and the low oil price. Established players are divesting to shore up their balance sheets, and infrastructure is comparatively less complex to value and sell, with a ready market at the right price,” said Shaun Reynolds, director of transaction services at Deloitte.
“Private equity firms and specialist energy infrastructure funds are likely buyers – specifically those with a solid grasp of the UKCS. They’ll look to take a number of assets under management, create a portfolio, maximize their potential and then look to divest; most likely to a pension fund aiming for steady returns from a stable asset,” he added.
“It’s a positive step for the UKCS. Private equity will provide focused management of the assets and ensure they are being used to their utmost potential. That can only be a good thing, particularly from a longevity perspective as we seek to make the most of the North Sea,” Reynolds concluded.
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