Oil Giants Hunt Bargains in Oil Sands
Source: Financial Post, Claudia Cattaneo (2/16/09)
"If you are a major, this is a once-in-a-generation opportunity to build a huge position."
But in contrast to the last wave of foreign takeovers, made at hefty premiums and sometimes for marginal properties, multinationals including Paris-based Total SA, London-based BP PLC and Irving, Tex.-based Exxon Mobil Corp. are hunting for top-drawer properties at today's cheap stock prices or taking advantage of the sector's downturn to bolster their presence.
As one investment banker put it: "If you are a major, this is a once-in-a-generation opportunity to build a huge position."
Why now? Oil majors remain financially healthy even in today's depressed oil-price environment; they've been in the business long enough to know that oil prices are cyclical and that the current downturn won't last; those that missed acquisition opportunities in the past see the current downturn as a re-entry point at low prices; they see access to new reserves globally as a challenge; they have refineries in the United States that need feedstock; there are plenty of buying opportunities that were not there when oil prices were high.