Partner Article

Wellstream set for global takeover battle

OIL services giant Wellstream is in the sights four potential bidders as major industry players look to get a slice of the Newcastle firm’s hugely lucrative foothold in Brazil.

The suitors who have approached the Walker-headquartered company, which makes about half its revenues in Brazil, are understood to be Italy’s Saipem, General Electric and US operators National Oilwell Vargo and Cameron International.

As well as its exposure to the South American country, another of Wellstream’s attractions is its flexible risers – or pipes – used for oil rigs in offshore drilling.

These are favoured by Petrobas, Brazil’s aggressive state-controlled oil giant. Petrobas accounts for almost half Wellstream’s business and is raising more than $75bn (£48bn) in the world’s biggest rights issue to help fund a $224bn exploration plan to turn the Latin American country into a major oil exporter.

Saipem, 43pc-owned by Italian energy giant Eni, is a market leader in rigid risers but does not produce flexible pipes and has been linked with speculation over Wellstream for some time.

The US operators Cameron International and National Oilwell Varco have little or no exposure to Brazil.

Analysts said an acquisition by a bigger rival could allow Wellstream to drive a harder bargain with Petrobas.

Credit Suisse is understood to have been appointed as Wellstream’s adviser.

This was posted in Bdaily's Members' News section by Ruth Mitchell .