M&A in Sub-Saharan Africa: Market still sluggish despite recent activity

Deal completion in Sub Saharan Africa fell to its lowest level in over five years after companies cut discretionary spend in response to the oil price crash. The average buying price/boe for assets tumbled 65% from the highs of 2014 to just under US$7/boe as supply outstripped demand and buyers stopped paying upfront for upside. Recent purchases by Woodside in Senegal and PERTAMINA in Gabon raised expectations of a market recovery. But hopes were dampened after Sonangol reneged on an earlier US$1.75 billion deal to buy Cobalt's deepwater position in Angola due to financial constraints.Looking ahead Shell's planned US$30 billion divestment programme will include fields in Nigeria and Gabon. Total and Eni are considering sales in Congo and ExxonMobil's impending acquisition of a stake in Mozambique LNG is generating excitement. Assets held by indebted local companies in Nigeria could also be up for grabs.