AP Moeller-Maersk looking for acquisitions in North Sea

AP Moeller-Maersk chief executive Nils Smedegaard Andersen yesterday said that the company was actively looking for acquisitions in the North Sea as the current drop in energy prices made takeovers a better option than exploration.

"We absolutely have appetite for acquisitions," Andersen said in an interview, Bloomberg reported.

"We think it's better to reduce spending on exploration and then focus more on acquisitions as a method to grow reserve," he added.

Maersk's oil unit was now re-focusing on home waters, where it started operations in the 1960s.

The company, which in recent decades expanded to countries including Algeria, Angola and Qatar, could find the best value in the tight chalk reservoirs of the North Sea, where it enjoyed a market-leading advantage with its oil-retrieving technologies, according to the chief executive.

"There's a lot of stuff for sale in the North Sea and some of it looks good, other things less so, but we're looking at all of it to see what's best to spend money on," Andersen said.

"We perceive the North Sea as the area that matches our expertise the best way. Historically we have had a lot of success in the North Sea, both in exploration and in expansions, and we want to build on that."

Meanwhile, the company cut its forecast for global trade growth and gave up on several medium-term profit forecasts but the Danish conglomerate still reported higher-than-expected earnings.

Shares in the shipping-to-oil-rigs conglomerate were up 7 per cent yesterday as it also said it would start its second share buyback programme to purchase about $1 billion of stock.

Pointing to the global economic uncertainty and the persistence of low oil prices, as also the weak state of the container shipping industry, Maersk made an unusually large number of changes to its guidance.

It now expected global container demand – a proxy for growth in world trade to rise only 2-4 per cent, down from 3-5 per cent. It withdrew its mid-term profit targets for all businesses except Maersk Line, the world's largest container shipping company.

However, it also strengthened its guidance for its oil and drilling rig businesses this year even as it boosted its return target for Maersk Line and insisted it would defend its market leadership in container shipping aggressively.