Italian energy giant Eni is believed to be inching towards a near-£5 billion takeover of North Sea company Neptune Energy.
France’s TotalEnergies is also thought to be circling the UK firm but Eni is the frontrunner.
According to news agency Bloomberg, Eni could announce a deal as soon as this week.
But a final decision is yet to be made and there is no certainty there will be a deal, Bloomberg sources cautioned.
Are ‘exclusive’ talks between Eni and Neptune nearing a conclusion?
It was another news agency, Reuters, that reported earlier this month that Rome-based Eni was in “exclusive talks” to buy private equity-backed gas and oil producer Neptune.
Reuters said Eni had sweetened its bid to “below $6 billion” (£4.82 billion).
Neptune’s backers include Carlyle Group and CVC Capital Partners. All three firms have declined to comment on the takeover speculation, while Eni itself is also saying nothing.
According to Reuters, Neptune and Eni recently started a new round of talks after months of slow-moving negotiations.
Eni raised its initial bid and may now be prepared to invest between $5bn (£4bn) and $6bn in a takeover, sources said.
Neptune was launched in 2015 as Neptune Oil and Gas.
Carlyle and CVC Capital Partners signed up former Centrica boss Sam Laidlaw to lead the new investment company targeting “large oil and gas portfolios that may come available as a result of current energy market dynamics”.
The move came five months after the then prime minister David Cameron revealed Washington DC-based Carlyle was putting £660 million into the UK offshore industry in a “clear vote of confidence” in the sector.
China owns nearly half of the firm
But the largest stake in London and Aberdeen-based Neptune is held in the Far East.
State-owned China Investment Corporation, of Beijing, controls nearly 50% of the business. Carlyle Group and CVC having stakes of 30.6% and 20.4% respectively.
Neptune has oil and gas interests in the UK, Norway, the Netherlands, Germany, North Africa and the Asia-Pacific region.
Its UK offshore oil and gas assets are managed from offices on North Esplanade West, Aberdeen.
The company operates the Cygnus Alpha and Cygnus Bravo facilities, producing gas from the Cygnus field – the UK southern North Sea’s largest single producing gas asset.
In the central North Sea Neptune is developing the Seagull oil and gas field alongside partners BP and Japex. Seagull is due to come onstream this year.
Neptune also has a working interest in the Isabella exploration discovery in the central North Sea.
Mr Laidlaw is now executive chairman of the firm and others on the board include Pete Jones, the former Aberdeen-based managing director of Middle East-owed Taqa Europe.
Eni has been active in the UK since 1964. Its current business in Britain spans exploration and production, liquefied natural gas, refining and chemicals, among others. The company shut a North Sea oil and gas -focused office in Aberdeen in 2004.
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