EY - Global oil and gas transactions review

Global oil and gas transactions review

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With an average of almost four transactions every day, oil and gas has remained one of the most active and resilient global sectors for M&A.

In 2013, the total disclosed or reported oil and gas transaction value was US$337 billion. This total was significantly lower (down 21%) than the record high of $423 billion posted in 2012.

Global oil and gas transaction activity

EY’s chart of oil and gas transaction activity 2006 to 2013

Global oil and gas transaction activity

EY’s chart of oil and gas transaction activity 2006 to 2013




Notably in 2013, there was a reduced willingness to commit to larger transactions. In 2012, 98 oil and gas transactions exceeded $1 billion in value, compared with just 70 in 2013. In 2012, there were four “mega-deals” with reported values over $10 billion, but in 2013, there were only three such deals.

In 2012, the combined value of all deals larger than $1 billion topped $309 billion, while in 2013, deals $1 billion or greater totaled only $241 billion. Interestingly though, even with the sharp reduction in the absolute number of deals in 2013, the relative mix of deal sizes (i.e., in percentage terms) has remained essentially the same over the last four years.

The volume of deals was volatile by quarter, with activity in the second quarter notably stronger, and activity in the fourth quarter a bit weaker.

As we look forward to 2014 we see the M&A market being driven by the continuation of a number of trends as well as some new factors coming into play. Assessing the impact of these sometimes competing trends involves a great deal of uncertainty.

As we reflect on the 2013 M&A market, the central features have been a very well supplied M&A market, struggling with efficient price discovery. We do not see any reduction in the volume of assets coming to market, so the key to 2014 from an M&A perspective is a renewed consensus on asset pricing. This in turn relies on the return of some form of consensus on oil and gas price trajectories. Here the signs are relatively promising at least for oil. As such 2013 may mark the low point for M&A activity in the sector.