Australia Deepens Review of Subsea7-Saipem Merger

(Credit: Saipem)

Australia's competition regulator said on Friday the proposed merger of energy contractors Subsea7 and Saipem would face a second-phase review over concerns it could reduce competition in key offshore oil and gas services.

Here are a few details:

The Australian Competition and Consumer Commission (ACCC) said the deal could lessen competition in the supply of certain subsea infrastructure used to connect underwater wells and production systems to surface facilities.

The regulator described the services as critical to Australia's offshore oil and gas sector.

The decision came a little over a week after Brazil's antitrust agency approved the merger without any conditions.

"We will conduct further in-depth inquiries during the Phase 2 assessment and seek more information about the likely competitive effects of this proposed merger," ACCC Commissioner Philip Williams said.

Saipem declined to comment when contacted by Reuters, while Subsea7 did not immediately respond.

The tie-up between the two providers of offshore engineering and installation services has already faced opposition from major oil firms operating in Brazil, including Exxon Mobil XOM.N, Petrobras PETR3.SA and TotalEnergies TTEF.PA.

They fear the combined company could gain too much market power and impose additional costs, delay projects and pressure some clients into exclusive long-term contracts.

(Reuters - Reporting by Nichiket Sunil in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)