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Upstream oil and gas M&A activity lacklustre in 2015

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Staff writer ▼ | January 20, 2016
Upstream oil and gas mergers and acquisitions levels were decidedly lacklustre over 2015, according to a report by 1Derrick.
Oil exploration
Oil and gas industry   According to a report by 1Derrick:
The top three deals in 2015 were Shell, Samruk-Kazyna, and Noble Energy.
The oil and gas consultancy pegged last year's headline upstream M&A valuation at $144 billion; while another $35 billion of deals announced were cancelled in wake of the oil price slump.

Mangesh Hirve, analyst and managing director at 1Derrick, noted: "Excluding the $82 billion Shell and BG Group deal noted over the second quarter of 2015, the aggregate deal value came in at $62 billion, or about $15 billion per quarter.

"This quarterly deal flow, in the wake of increased oil price uncertainty, is significantly lower than the deal flow observed in the wake of the last oil price slump during Q4 2008 to Q3 2009, when the average quarterly deal value was $26 billion.

"In fact, asset deals were very difficult to negotiate with the value of asset transactions at the lowest since 2010."

The top three deals in 2015 were Shell ($82 billion for BG Group), Samruk-Kazyna ($4.7 billion, KazMunaiGas' 8.4% in Kashaganfield, Kazakhstan) and Noble Energy ($3.8 billion, Rosetta Resources, Eagle Ford, US).

However, 1Derrick found downstream M&A in a much better state with deal valuation at $52 billion; highest on file since 2011.