Korea National Oil taps Scotia Bank for UK unit stake sale

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State-run Korea National Oil Corp (KNOC) has hired Canada’s Scotia Bank to help find a financial partner for a 30 percent stake in its British subsidiary Dana Petroleum, two banking sources said.

The process is expected to kick off in early May, when confidential information packages will be circulated to interested parties to undertake due diligence checks on the business, one of the sources said.

The source added the stake could be valued at up to $550 million.

KNOC bought Aberdeen-based Dana, an exploration and production company with operations across the North Sea, the Netherlands and Egypt, in 2010 for $2.9 billion, including the company’s bondholders.

At the time, the acquisition was seen as the biggest hostile deal by a South Korean firm keen to boost the country’s oil reserves.

A KNOC spokesman said Dana’s stake sale is under way but more details could not be disclosed.

Dana Petroleum and Scotia Bank did not respond to a request for comment.

With an average production of 65,000 barrels of oil and gas per day and 70 percent of operations in the North Sea, the explorer is likely to appeal to private equity funds already operating in the region.

Private equity-backed investors have entered the British oil and gas sector over the past five years, when major oil and gas companies were forced to sell assets, under pressure from a fall in oil prices to near 14-year lows of $26 a barrel in 2016.

Funds including Neptune, backed by Carlyle Group and CVC Capital Partners, and Chrysaor, backed by EIG Global Partners, among others, have since raised billions of dollars to snap up bargains in the sector.

U.S. energy group ConocoPhillips agreed to sell its oil and gas assets in the British North Sea to private equity-backed Chrysaor for $2.68 billion.

U.S. oil major Chevron in July kicked off the sale of its central North Sea oil and gas fields and private equity firm HitecVision is also seeking to sell its British North Sea oil and gas unit Verus Petroleum, which last year completed a string of large acquisitions, industry and banking sources previously said.

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Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.