(Reuters) – The global upstream industry could see deals worth another $150 billion closed by the end of the year, with focus on U.S. shale plays other than the Permian Basin, Rystad Energy analysts said in a report.
M&A activity in the global upstream industry has already crossed the $64 billion mark this year, with most of it focused on U.S. shale plays.
WHY IT IS IMPORTANT
First-quarter M&A activity in North America was nearly $54 billion, or 83 percent, of the global total and the region is expected to drive consolidation for the rest of the year , the report says.
THE CONTEXT
The Permian Basin, which spans west Texas and southeast New Mexico, has been the focus of most deals this year, with companies vying to snap up assets located in that area.
Other U.S. shale plays are also expected to attract significant investment, with about $41 billion in non-Permian opportunities on the market, according to the report, such as the potential sale of Exxon Mobil’s Bakken portfolio in Dakota North.
IN NUMBERS
Globally, deals in the sector increased 145% year-over-year (yoy) in the first quarter to $64 billion, the highest level since 2019, according to The report.
Outside the United States, transactions remained strong in the first quarter, with $10.5 billion transacted, an increase of 5% year-over-year. Demand for gas-producing resources represented approximately 66% of total oil and gas-producing assets purchased and sold.
KEY QUOTES
“…with appetite still strong, deal-hungry players are seeking acquisitions outside the (Permian) Basin. A shift in power could be on the cards, with non-Permian assets taking center stage in the future deal pipeline North American.” said Atul Raina, vice president of upstream research at Rystad Energy.
(Reporting by Vallari Srivastava in Bangalore: Editing by Tasim Zahid)
