Five trends set to characterize Canadian oil and gas transactions market in 2013
(Calgary, 10 December 2012) Over the last year, Canadian oil and gas transactions have centred on increased interest from Asian investors and the high-profile deliberations by the Canadian government about the implications of foreign investment in Canada’s oil and gas industry.
But Canadian transactions will look different in the future — influenced by macro factors, including the growth of US unconventional oil and natural gas production, transportation and infrastructure constraints, increased environmental regulations, continued interest from Asian investors (both state-owned enterprises and private investors), and new clarity on the rules governing foreign investment.
Ernst & Young’s new report, Canadian oil and gas: Transactions and trends 2012-13, points to the following trends companies can expect in 2013:
- Back to business basics: Companies are refocusing on cost reduction, performance improvement, capital allocation and targeted organic growth initiatives.
- Unconventionals have changed the energy dynamic: Shale gas, tight oil and the oilsands are influencing where companies deploy their capital.
- Technology is the name of the game: Technology now plays a critical role in accessing reserves in increasingly difficult and challenging geological formations.
- People are everything: National oil companies stand to benefit more from the business acumen and know-how developed by Canadians and applied in the Canadian energy sector.
- Assets will be priced with a far greater appreciation of underlying risks: Expect to see an increased discount applied to assets in these challenging jurisdictions.
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