Kuwait Energy in merger discussion with Soco Int’l

dubai — Soco International, an oil and gas exploration and production company listed on the London Stock Exchange, said on Monday it was evaluating a merger with oil and gas firm Kuwait Energy.

A merger would provide a way for the Kuwaiti company to go public after it failed last year to complete an initial public offer of its shares on the London exchange, through which it hoped to raise about $150 million.

Soco, which has a market capitalisation of about $500 million, said discussions with Kuwait Energy’s newly constituted board were preliminary and no deal terms had been agreed.

“Soco confirms that, in the context of its stated objective to strategically reshape its business and grow its portfolio, it is evaluating a potential merger of equals with Kuwait Energy,” the company said in a statement issued via the London Stock Exchange.

Kuwait Energy declined to comment on the merger discussions.

Kuwait Energy has assets in Iraq, Oman, Egypt and Yemen. Soco has a very different geographic exposure, with interests in Vietnam, Congo and Angola.

Thomas Streater, head of investment research at MB Commodities Capital in Dubai, said the merger could benefit both firms. “It makes sense for small oil companies to merge as getting bigger scale gives them balance sheet to face volatility. Soco would get a portfolio of low cost, attractive assets, and for Kuwait Energy it would be a way to monetise some of their holdings,” he said. —