Kuwait Energy explores UK merger as it eyes London listing

Kuwait Energy, which operates a clutch of concessions across conflict zones in the Middle East, is in talks to merge to with London-listed Soco International, as it looks to revive a bid to list on the London Stock Exchange.

“Kuwait Energy confirms that it is in preliminary discussions with Soco in this regard. At this stage, there can be no certainty that any agreement will be reached,” the company said.

It added that it would “only pursue a transaction that it considers optimal for the benefit of its shareholders” and that it would keep all stakeholders informed of any developments.

A merger with Soco, which has a market capitalisation of US$500 million will give the Kuwait firm leverage to list in London, after it failed in an earlier bid last year to request for flotation on the exchange. Kuwait Energy had hoped to raise about $150m through its initial public offering last year.

Soco also said it is evaluating “a merger of equals with Kuwait Energy” in context of strategically reshaping its business and growing its portfolio.

The UK firm currently operates a minority stake (25 per cent) in Vietnam with Petrovietnam and also holds a 40.39 per cent interest in the North Congo basin offshore the African state. Average production from across its blocks stood at about 29,600 barrels of oil equivalent per day (boepd) during the first half of 2017.

A merger with Kuwait Energy will give Soco access to a wider portfolio of reserves-rich concessions in the Middle East and North Africa. Kuwait Energy operates 10 concessions across Iraq, Egypt, Yemen and Oman and registered an average daily production of 26,962 boepd for the year ending September 2017. Total production for the period stood at 7 million barrels of oil equivalent, the firm said in its last financial statement.

Kuwait Energy plans to commence production in the first quarter of this year from the Faihaa-4 well in Block 9 in Iraq, where it well spudded a well last year.

In Iraq, the region’s second largest oil producer, Kuwait Energy holds majority stakes of 60 per cent each in the Siba and Block 9 concessions, with a minority interest in the Mansuriya field.

In its note to the London Stock Exchange last May, Kuwait Energy had said it would begin production from the Siba gasfield in the southern Basra province from this month.

However, production from the concession from where it hopes to maintain an average output level of 100 million cubic feet a day has not yet started.

A merger with Kuwait Energy will give

Soco access to a wider portfolio of reserves-rich concessions in the Middle East and North Africa