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Energy Deals Shift to Renewables and U.S. Shale Bargains

October 24, 2020

The post Energy Deals Shift to Renewables and U.S. Shale Bargains appeared first on POWER Magazine.

At a time when deal activity in the energy and natural resources sector has slowed dramatically—down 26.2% globally year-on-year—one development in particular may define the industry’s near-term future.

In mid-May 2020, French oil major Total opted not to pursue a deal, announced in 2019, to purchase the African assets of Anadarko Petroleum, a U.S. producer that was being acquired by Occidental Petroleum. Two weeks after it withdrew its $ 8.8 billion proposal for offshore oil and gas properties in Ghana, Total announced it would spend about $ 3.8 billion for a majority stake in a renewable energy project in the British North Sea. Total’s decision to move away from traditional oil and gas investments could be an indicator of what lies ahead for the industry.

The oil and gas sector was already on the brink of radical change before the COVID-19 pandemic crushed global demand for energy.…

Distress and Deals Continue to Persist in Energy Sector

October 8, 2019

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The post Distress and Deals Continue to Persist in Energy Sector appeared first on POWER Magazine.

At the end of last year, the power market began to lose steam. The credit market wasn’t as strong as it was at the start of the year and many people began speculating “doom and gloom” for the market. However, over the last few months, the power market has picked up and is beginning to show resiliency. As we explore below, there has also been a healthy amount of merger and acquisition (M&A) activity, highlighting that investor confidence is returning, even if only slightly.

The second quarter (Q2) of 2019, in particular, saw strong deal value compared to Q1, according to a recent report from PwC. The report notes that although overall deal volume decreased in Q2, deal value increased by nearly 55%, making it the highest-value quarter since Q2 2018. This was influenced by the absence of mega-deals ($ 5 billion or more) for the fourth consecutive quarter.…

PG&E Asks Bankruptcy Judge to Back Restructured Power Deals

August 2, 2019

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California utility Pacific Gas & Electric (PG&E) has asked the judge overseeing its bankruptcy case to support restructured deals with some of the utility’s power suppliers in an effort to reduce the price PG&E pays for those companies’ electricity.

The fate of $ 42 billion worth of long-term power purchase agreements (PPAs) is a key component of PG&E’s bankruptcy and is being closely watched by the power industry, which relies on long-term power contracts to attract financing.

PG&E’s court filing comes just weeks after California Gov. Gavin Newsom signed into law a measure to create a $ 21 billion state wildfire fund, designed to help the state’s three investor-owned utilities pay for damages resulting from wildfires in the state.

Allan Marks, a partner in the Los Angeles office of global law firm Milbank LLP, working in Milbank’s Project, Energy and Infrastructure Finance practice, told POWER, “In general, [the wildfire fund] is designed to provide liquidity if utilities aren’t able to handle wildfire claims without becoming insolvent.”…

Iraqi Official Casts Doubt on Deals With GE, Siemens

February 11, 2019

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Multibillion-dollar energy deals that both Siemens and General Electric (GE) signed with the Iraqi government last year may not come to fruition, according to the country’s electricity minister.

The Financial Times on February 10 reported that Luay Al-Khatteeb, who took his post late last year after the deals were brokered, told the newspaper, “I don’t have financial allocations or the processes available at hand, it doesn’t allow me to cherry-pick the right consultancies to deal with these multibillion-dollar deals. The bureaucracy that I inherited is . . . illogical.”

GE in October 2018 agreed to a $ 15 billion deal to provide 14 GW of power generation projects to Iraq, including 1.5 GW as early as this summer. The agreement, which was called “principles of co-operation” and is not binding, came after the Trump administration reportedly told Iraqi officials that diplomatic relations with the U.S. would be threatened if Iraq pursued that deal with Munich, Germany-based Siemens, instead of Boston, Massachusetts-based GE.…

Two Deals Shake Up Northeastern Power Landscape

November 4, 2016

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TransCanada—a leading North American energy company—has struck deals to sell its U.S. Northeast Power business. LS Power will acquire three principally natural gas–fired power plants and a wind farm from TransCanada, while ArcLight Capital Partners will buy 13 hydropower facilities located in Vermont, New Hampshire, and Massachusetts.

“The sale of our merchant U.S. Northeast Power business to fund a portion of our acquisition of [Columbia Pipeline Group Inc.] will further enhance the stability and predictability of our earnings and cash flow streams and support a strong and growing dividend,” said Russ Girling, TransCanada’s president and CEO.

The plants being acquired by LS Power are Ravenswood, a 2,480-MW multiple-unit facility with dual-fuel-capable steam turbine, combined cycle, and combustion turbine units located in Queens, N.Y.; Ironwood, a 778-MW combined cycle plant in Lebanon, Penn.; Ocean State Power, a 560-MW combined cycle plant in Burrillville, R.I.; and Kibby Wind, a 132-MW wind farm in Franklin County, Maine. LS Power, through its affiliate Helix Generation, will pay TransCanada $ 2.2 billion in cash for the 3,950-MW portfolio.…