Deloitte Reports on MENA Oil, Gas M&A

"In Libya and Egypt, regime change post Arab Spring has involved the reorganization of ministries and issues around the timely payment to operators in-country by the national oil company (NOC) and government, who are the primary off-taker of the hydrocarbons to meet local demand.

"Although it is unlikely that there will be any radical overhaul to the current systems in place, the transitional challenges around cash collection by the operators has led to financial distress for a number of operators, who are offering such assets for sale.

"Investors are factoring in different levels of discounts when assessing the value of assets with such risk exposures. Currently the market is seeing many instances where buyers and sellers cannot get together on pricing, due to their differing views on risk, with distressed deals being the primary driver of activity, where cash-rich companies are picking up these assets at large discounts."

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(Source: Deloitte)

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