We're an American Band - Foreign Firms Step Up Investments in U.S. Production and Infrastructure

The uncertainty and angst spurred by the ongoing trade war doesn’t seem to have dampened foreign companies’ interest in acquiring upstream and midstream energy assets in the U.S. The recent rumor — still unconfirmed — that Mitsubishi Corp. is in talks to acquire Aethon Energy Management’s massive holdings in the Haynesville for a reported $8 billion is only the latest indication that overseas interest may be stronger than ever. In today’s RBN blog, we’ll discuss the latest round of foreign investments in U.S. energy and what’s driving those deals. We’ll also look at the Aethon assets on the block.

European, Asian and Middle Eastern companies investing in the U.S. energy space isn’t a new phenomenon — Canadian investment is common too, of course. But the pace of foreign interest in U.S. assets has been accelerating the past few years, much of it tied to the global LNG trade. Controlling gas production and promising acreage near existing and planned LNG export terminals can give LNG traders and overseas gas consumers greater control over their feedgas supply, help them manage their supply costs, and enable them to hedge against price volatility. Similarly, investors in LNG liquefaction and export assets gain a greater say on how those facilities are managed, as well as a deeper understanding of how that part of the market works.

A few months ago, in American Pie, we discussed the flurry of foreign investment in U.S. energy production and infrastructure in 2023-24. Today, we’ll follow that up with a look at more recent deals, beginning with the potential sale of Aethon Energy Management, one of U.S.’s largest privately held gas producers. Recent reports suggested that Mitsubishi is in “advanced negotiations,” to acquire Aethon, though the Japanese trading giant said in late June that it “has not made any decision that is consistent with the contents of those reports.” (Back in April, it was reported that Abu Dhabi National Oil Co., or ADNOC, was interested in Aethon.)