Egypt leads the way: M&A in the Middle East and North Africa

Deal activity in MENA rose steeply in 2016, both in deal count and value. Eni's farm-down of 40% of Egypt's giant Zohr gas field to BP and Rosneft for a combined US$2.1 billion late in the 2017, ensured a respectable year. As a percentage of global spend MENA accounted for 2%, or 5 % if excluding North America: an improvement on recent years, if still some way short of 2013 levels. Since 2014, deals have tilted from gas to oil, driven mostly by operators seeking farm-in partners to share risk in costly large-scale developments. We expect this trend to continue, with the Nile Delta and Eastern Mediterranean likely to feature prominently. BP and Rosneft will likely take up their options for an additional 5% each of Zohr, whilst Israel's efforts to introduce more competition could see Noble and Delek sell down equity in Tamar.