April 30, 2007
And the Winner is…
Repsol is still the company to hold the unfortunate distinction of having paid the most generous price for a recent Gulf of Mexico asset, with its 2005 deal to buy BP’s Shenzi field. Tom Ellacott, analyst for Wood Mackenzie, who crunched the numbers for today’s Eni deal, came up with an implied long-term oil price of $42 a barrel, less than half of the price Repsol assumed, according to Wood Mackenzie. In fact, Mr Ellacott said Eni’s generosity was in line with recent deals and understandable given the amount of current interest in assets located in Gulf of Mexico. In contrast to Venezuela, where Mr Chavez is riding rough-shot over his foreign investors, the US is one of the dwindling number of places oil companies can be reasonably sure they won’t get strong-armed for a substantially bigger slice of profits and control by the government. Not even the UK can make that kind of boast.
