Australia's top investment bank, Macquarie Group, closed its London-based upstream oil and gas advisory division after a sharp drop in global deal making in recent years, banking sources said on Oct. 21.
The business, which oversaw the oil and gas production sector in Europe, Middle East and Africa, and which consisted of eight employees, was closed during the week of Oct. 17.
The banking sources said that three members of the upstream team will move to Macquarie Capital's midstream oil and gas investment service under Ed Winter. That division handles energy infrastructure such as pipelines and storage.
A Macquarie spokeswoman declined to comment.
The upstream banking desk was led up until last May by Jon Fitzpatrick, who left to establish advisory boutique Gneiss Energy together with other former Macquarie bankers, the sources said.
M&A activity in the sector outside the U.S. sharply declined following the oil price crash in mid-2014. International deals in the third quarter of 2016 reached $7 billion, the lowest level since 2008, according to consultancy 1Derrick.
Activity in the sector was nevertheless expected to pick up in the coming months amid a recovery in oil prices that narrowed the asset valuation gap between buyers and sellers.
Macquarie Capital's resources team, which is led by Raj Khatri, was a joint book runner in Hurricane Energy's 70 million pound share placment during this week. Hurricane Energy explores and produces in the U.K. North Sea.
Macquarie continues to have exposure to the oil sector through its commodities and financial markets team that runs hedging programs and reserves-based loans for companies.
Recommended Reading
US Raises Crude Production Growth Forecast for 2024
2024-03-12 - U.S. crude oil production will rise by 260,000 bbl/d to 13.19 MMbbl/d this year, the EIA said in its Short-Term Energy Outlook.
US Drillers Cut Oil, Gas Rigs for Fourth Week in a Row-Baker Hughes
2024-04-12 - The oil and gas rig count, an early indicator of future output, fell by three to 617 in the week to April 12, the lowest since November.
US Gas Rig Count Falls to Lowest Since January 2022
2024-03-22 - The combined oil and gas rig count, an early indicator of future output, fell by five to 624 in the week to March 22.
US Drillers Add Oil, Gas Rigs for First Time in Five Weeks
2024-04-19 - The oil and gas rig count, an early indicator of future output, rose by two to 619 in the week to April 19.
US Drillers Cut Oil, Gas Rigs for Third Week in a Row
2024-04-05 - The oil and gas rig count, an early indicator of future output, fell by one to 620 in the week to April 5, the lowest since early February.