The largest acquisition by
FDI of a U.S. energy company
in 2005 was Norsk Hydro’s (Norway)
purchase for $2.5 billion (including assumed debt) of Spinnaker Exploration,
which did most of its exploration, development, and production of oil and gas
in the Gulf of Mexico.At the time, the deal fitted well with Norsk
Hydro’s announced plans to increase foreign oil and gas production by roughly
40 percent between 2005 and 2008.However, in 2006, Norsk Hydro and Statoil (Norway) agreed to combine their oil
and gas operations.(The Norwegian
government owns 45 percent of Norsk Hydro and 70 percent of Statoil.)Because Norsk Hydro uses the “successful efforts” method of oil
and gas accounting (which expenses geological and geophysical costs) while
Spinnaker used the “full cost” method (which capitalizes geological and
geophysical costs), the cost of the seismic database licenses that Norsk Hydro
gained control of in the acquisition and that had been capitalized by Spinnaker
were expensed by Norsk Hydro and not added as assets to its balance sheet.
Table
2.Completed Acquisitions of U.S.
Energy Assets by Foreign Direct Investors, 2005*
Acquiring Foreign Parent Company
(Country)
U.S. Subsidiary
Company or
Asset Being
Acquired
Business of
Acquired
Company
or Asset
Divesting
U.S. Parent
Company
Estimated
Asset
Value
(million $)
Closing Month
Norsk
Hydro
(Norway)
NA
Spinnaker Exploration
oil
and gas production
Spinnaker Exploration
2,458
December
Seven
& I
(Japan)
NA
7-Eleven
(remaining outstanding shares)
petroleum marketing
7-Eleven
999
a
November
TransCanada
(Canada)
NA
567 mw of hydroelectric generation
electric power
National Energy &
Gas Transmission
503
April
Santos
(Australia)
NA
Tipperary
oil and gas production
Tipperary
466
October
Enerplus
Resources Fund
(Canada)
Enerplus Resources (USA)
Lyco Energy
oil and gas production
Lyco Energy
425
August
USB
(Switzerland)
NA
76 bcf natural gas over 4 years
oil & gas production
Dominion Resources
424
March
Caisse
de dépôt et placement du Québec
(Canada)
NA
Southern Star Central Gas Pipeline
(40 percent)
natural gas pipeline
American International Group
335
July
Woodside
Petroleum
(Australia)
Woodside Energy
(USA)
Gryphon Exploration
oil & gas production
Gryphon Exploration
297
August
Siem
Offshore
(Norway)
NA
Subsea 7
(50 percent)
subsea engineering & construction
Halliburton
200
January
Trinidad
Energy Services Income Trust
(Canada)
NA
Cheyenne Drilling
oil & gas production
Cheyenne Drilling
189
December
EnCana
(Canada)
NA
24,000 net acres of land
oil & gas production
Progress Energy
178
December
Nexen
(Canada)
NA
Island Gas
(80 percent)
oil & gas production
Island Gas
176
December
Enbridge
(Canada)
Enbridge Energy Partners
natural gas gathering & processing assets
mid-stream natural gas
Devon Energy
165
January
Arcapita
Bank
(Bahrain)
GASStorage Investment
Falcon Gas Storage
(majority stake)
mid-stream natural gas
Energy Spectrum
135
b
July
CSE
Global
(Singapore)
NA
Energy Storage & Power
electric power
Energy Storage & Power
120
c
July
*Includes only transactions valued at $100 million or
greater.
aIncludes convenience stores that do
not sell petroleum products.
bIncludes $35 million in common
equity contributions by Arcapita Bank.