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Infrastructure investment could boost oil and gas industry, Deloitte claims

Published 08/06/2016

A £324 million deal between BP and private equity firm Antin Infrastructure Partners was agreed last year for the purchase of the oil firm's stake in a major North Sea pipeline
A £324 million deal between BP and private equity firm Antin Infrastructure Partners was agreed last year for the purchase of the oil firm's stake in a major North Sea pipeline

An expected increase in North Sea infrastructure investment deals could be a "positive development" for the crisis-hit oil and gas industry, a business advisory firm has said.

A growing number of private equity funds are looking to invest in infrastructure, including pipelines, as the sector's operators look at selling off assets, according to Deloitte.

The firm's latest European Infrastructure Investors survey found that pipelines, in particular, have provided a "solid and steady return" over the last five years.

The report also found pipelines will remain a "strong focus" for infrastructure investors in the future, along with gas and fuel storage.

A £324 million deal between BP and private equity firm Antin Infrastructure Partners was agreed last year for the purchase of the oil firm's stake in a major North Sea pipeline.

Shaun Reynolds, of Deloitte, said: "Historically, big oil and gas operators developed and owned what they needed, transporting their major discoveries through proprietary pipelines and refining it in their own processing plants. That's largely remained the case until the last two or three years.

"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.

"Private equity firms and specialist energy infrastructure funds are likely buyers - specifically those with a solid grasp of the UK Continental Shelf (UKCS)."

Mr Reynolds 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."

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