ESG due diligence services for oil & gas M&A

Fair valuation, lower investment risk and reputation protection

Assessing the ESG profile of an asset is essential to avoid importing risk into your portfolio. Conversely, paying attention to ESG can be a route to greater efficiency and value creation. In your due diligence reviews of potential oil and gas investments, it’s vital to consider direct financial, operational and reputational impacts of ESG issues on your business.

In the oil and gas industry, some issues can be easy to miss. ‘Data rooms’ with a technical focus may not highlight potential reputational damage, while overlooking abandonment liabilities can prove costly. Meanwhile, effective quantitative and qualitative ESG data gathering can cut back on the need for extensive warranties.

From the Buy or Sell side, ESG data is of primary importance

As legislation across the world becomes tighter for ESG reporting and verification, it will increasingly impact M&A transactions.

When selling, you will be required to make salient data accessible. Upfront disclosure of key ESG metrics will also result in offers that can move to completion in a timely fashion.

When acquiring an asset, purchasers need to understand the ESG implications of projects joining their portfolio. You will need to assess whether they contribute to reduction targets or a growth in your overall footprint, using quantifiable metrics.

Making sure that all the relevant ESG data has been examined and verified will satisfy stakeholders and/or funding organisations – and avoid surprises.

How can RPS Help?

Some companies are divesting some of their hydrocarbon assets in a move towards decarbonising their portfolio. Others are acquiring assets (particularly gas) for a balanced approach to the energy transition, whilst being mindful of energy security. Alongside the financial value within the deal, they now need to consider alignment on ESG.

At RPS we can investigate and ground truth the ESG characteristics of an asset or company, whether you are a seller or a buyer. Our experienced teams – including seasoned oil and gas professionals, ESG advisors and due diligence specialists – can combine a technical evaluation alongside the ESG investigations necessary to provide a complete picture.

We can also support you in the collection, presentation and explanation of ESG data, making it accessible for stakeholders.   For example, when sellers are required to present in-person or virtual ‘data rooms’, RPS supports by constructing and/or interrogating rooms with accessible documentation (such as a guide to the ESG metrics), enabling more thorough analysis. We also provide a jump-off point to the underlying data if a deeper dive is required.

Whether you are buying or selling, we can advise you on the best ESG strategy to make the sale go smoothly and to achieve the best value.

ESG value creation

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