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M&A activity in general, and in the energy sector in particular, was relatively mute in the last year. Activity picked up towards the end of the year with BP's sale of its 51 per cent stake in its Indian solar power business to Tata, Repsol's acquisition of stakes in oil and gas fields in Mississippi, EDF's announcement to acquire Edison, and earlier this year Eon's planned acquisition of a stake in Brazil's MPX Energia. Despite that, 2011 overall was still a dull year for M&A transactions.
Over the past few years, a number of countries across Africa have made significant discoveries of oil and gas reserves. Ghana, for instance, discovered about 3 billion barrels of oil equivalent and its Jubilee field is now producing 105,000 barrels per day. Along the east coast of Africa, Mozambique, Tanzania and Kenya are also making significant discoveries. Gas discoveries in Mozambique and Tanzania have reached over 100 trillion cubic feet, comparable to any of the biggest global gas discoveries.
Riverstone Holdings, a US-based energy-focused private equity firm, has just announced launching a £1.5 billion closed-ended investment fund, called Riverstone Energy, to be floated on the main market of the London Stock Exchange by end of October. The company confirms that it has secured binding commitments of £500 million from five cornerstone investors who will buy 50 million shares at £10 each plus an additional £50 million of Riverstone Holdings' own capital.
The new fund is expected to invest across the global energy sector, focusing on the exploration, production, and midstream segments. Sir Robert Wilson, the former chairman of BG Group will be its chairman and members of the board will include Jim Hackett, former chief executive of Anadarko Petroleum; Lord Browne, former chief executive of BP who is now a Partner at Riverstone Holdings; as well as Riverstone's co-founders David Leuschen and Pierre Lapeyre Jr.
It is argued that the global drilling rig industry is in the middle of the biggest build boom since the 1980s. This is due to a number of key factors, including a steady projected increase in demand, especially for deepwater rigs that can drill in depths greater than 4,000ft.