There are diverse buyers for downstream transactions, including IOCs, NOCs, independents, oil traders, PE and infrastructure funds.

Transaction trends diverge during 2011

The downstream sector, unlike the midstream sector, experienced further decline in transaction volumes during 2011, continuing the trend that started in 2007.

This was primarily driven by increasing downside risks for oil demand due to the global economic uncertainty. There were 103 transactions in the sector in 2011, some 16% lower than 2010.

The disclosed value of downstream transactions was also lower in 2011 at US$38b compared with US$40b a year earlier. There are diverse buyers for downstream transactions, including IOCs, NOCs, independents, oil traders, PE and infrastructure funds.

Top 10 downstream transactions in 2011 based on disclosed value

Downstream deals by type

Number of downstream deals by typeValue of downstream deals by type

Resurgence in US and European refining transactions

There were 18 transactions involving refineries during 2011, of which 14 involved refineries in North America and Europe.

The largest refining transaction in terms of disclosed deal size is HollyFrontier Corporation's acquisition of Frontier Oil Corporation's refineries in Cheyenne Wyoming and El Dorado Kansas for US$2.7b.

Strong demand for retail marketing assets

There were 22 transactions during 2011 involving retail marketing assets, with North America and Europe accounting for half of these transactions.

The largest retail marketing transaction in terms of disclosed deal size is Vitol and Helios Investment Partners' acquisition of Shell's downstream businesses in 14 African countries for US$1.0b.

Storage terminals — jewel in the crown

There were 42 transactions during 2011 involving storage terminals, with North America and Europe accounting for 72% of these transactions.

The largest storage transaction in terms of disclosed deal size is Boardwalk HP Storage Company LLC's acquisition of Enterprise Products Partners LP's natural gas storage facilities in Mississippi for US$0.6b.

The midstream segment

The midstream segment of the sector saw a modest increase in transaction activity in 2011, with the number of deals rising from 81 in 2010 to 85 in 2011 (an increase of 5%).

With several large transactions in 2011, most notably Kinder Morgan's US$38b acquisition of the US' largest diversified natural gas player, El Paso, reported deal value increased significantly, from US$27b in 2010 to US$87b in 2011.

This sector is predominately North American, but we expect increasing global midstream deal activity

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