The global oil and gas industry was a “hotbed” of merger and acquisition (M&A) activity during 2011 despite widespread economic woes, a survey has found.
Professional services firm Ernst and Young (E&Y) said yesterday its study showed a total of 1,322 transactions, an increase of more than 5% on 2010.
E&Y added the figures showed oil and gas remained one of the most resilient sectors for M&As worldwide.
Ally Rule, oil and gas transaction advisory service partner at E&Y in Aberdeen, said: “The market has proved that it can adapt to higher levels of uncertainty and keep transacting.
“The key questions now are how it will cope with the combination of commodity price volatility and structural contraction in global debt capacity.”
E&Y said the aggregate value of oil and gas deals last year totalled £204billion.
This was about 7% below the 2010 figure, which E&Y said was largely the result of a lack of “megadeals”.
In 2010, the number of billion-dollar-plus transactions totalled 76 and last year this declined to 71.
E&Y said the upstream segment was again the most active in 2011, representing 72% of deal volume.
North America – accounting for 562 deals, or 43% of the total – remained the most active market last year but the strongest growing regions were Europe and former Soviet republics, reflecting renewed interest in these regions.
Downstream activity was said to have declined modestly during 2011, although the overall value was comparable with 2010.
Mr Rule said overall transaction activity was likely to continue at similar levels into 2012 but would be affected by wider economic volatility.
He added: “As ever, high-quality upstream assets will attract buyers and good midstream assets will too. Downstream, the components of the sector most heavily exposed to the global economy’s problem areas will find transactions harder to finance and close.
“Winners will need to manage risk, volatility and capital across a global political landscape.”
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