Energy IB in London
Hi everyone,
I’m looking for some insight into how the Oil & Gas (O&G) investment banking landscape works in London compared to Houston. I have a few specific questions:
- Technical Teams (A&D): It seems London lacks the heavy G&G (Geology & Geophysics) and reservoir engineering teams found in Houston. Do London offices typically lean on Houston for technical coverage? Also, how do Elite Boutiques (EBs) like Rothschild, which don't have massive in-house technical teams even in the US, effectively advise O&G clients on asset-level deals?
- Sector Specialization: In Houston, the sheer volume of deals allows bankers to specialize in specific sub-sectors (Upstream, Midstream, OFS) as early as the Associate level. Does London follow this siloed approach, or is the Natural Resources Group (NRG) more generalist due to smaller deal flow?
- Midstream Modeling: Houston midstream modeling is notoriously complex due to the MLP (Master Limited Partnership) structures. Since MLPs aren't the standard in the UK/Europe, is Midstream valuation in London generally more straightforward (closer to traditional DCF/infrastructure modeling)?
Would appreciate any insights from those currently on the ground. Thanks!
Great questions. Not entirely "fluent" in the O&G world but have acquaintances in that sector. London O&G in IB is going to be much more generalist than Houston. In London employees are going to have mostly banking/commercial backgrounds with potentially having studied geology or something similar (learning the O&G technicals on the job) but did not work directly in O&G while in Houston it will be the reverse, i.e., many have an O&G background but learn the financials etc on the job. Depends if you prefer a corporate ("professional") high finance environment (London) or a more technical, "boots-on-the-ground" environment (Houston). If you want to be a banker long-term London is a no-brainer, but if you want to exit in C-suite of major oil companies, Houston sounds like a better shout. Good luck
Thanks for the detailed breakdown, that makes a lot of sense. Since London is more 'commercial' and lacks in-house A&D (Technical) teams, how does the asset-level modeling usually work? Is there still a heavy reliance on Houston's A&D guys for the actual 'heavy lifting' on the numbers? Also, I'm curious if a London O&G banker spends more time on traditional Upstream deals or if the workflow is now dominated by the shift to Low Carbon energy.
The London teams will be quite fluent in those areas still - many will have bachelors or masters in geology and what is called "petroleum sciences" in the UK. The focus will be more Middle Eastern and African. Bigger banks and shops will have specialized teams. However mid-level shops will often "outsource" to specialist consultants (often based in Houston) or to bigger shops.
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