Total acquisitions and divestitures by foreign direct investors (FDI) of U.S. energy assets fell to $10 billion in 2005 from $12 billion in the prior year, the Energy Information Administration (EIA) said in a report released Wednesday.

Foreign investor acquisitions of U.S. energy assets (10% or more of a company) fell 9% to about $7 billion in 2005 from $7.8 billion in 2004, the agency said. "The most notable change in acquisitions by FDI occurred in electric power, where purchases fell [to $623 million in 2005 from $1.9 billion], and in oil and gas production, where the number of transactions greater than $100 million rose from five to nine. The largest single purchase by FDI in 2005 was only $0.5 billion, while there were two acquisitions of almost $1 billion each in electric power in 2004."

While overall purchases of U.S. energy assets by foreign investors dropped in 2005, acquisitions of U.S. oil and natural gas production facilities climbed in 2005 to $4.8 from approximately $3.88 billion in 2004, the EIA reported. The largest transaction was Norsk Hydro's purchase of Gulf of Mexico producer Spinnaker Exploration for $2.5 billion (see Daily GPI, Sept. 20, 2005).

In 2005, divestitures of U.S. energy operations by foreign investors fell to $2.84 billion from $4.3 billion in the prior year, "the lowest level since 1999, with only four transactions over $100 million," according to the agency. In contrast, it noted there were 11 divestitures of U.S. assets by foreign investors worth more than $100 million in 2004. "Sales in coal and in petroleum refining and marketing and mid/downstream natural gas fell, with only one small deal between them, while divestitures in oil and gas production, and especially in electric power, increased."

The largest divestiture by a foreign investor in 2005 was Credit Suisse's sale of American Ref-Fuel Holdings, an owner-operator of six waste-to-energy facilities in the Northeast, to Danielson Holding (now Covanta Holding) for an estimated $2 billion.

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