Top global oil and gas companies are are scouting for smaller exploration and development firms to boost hydrocarbon reserves through acquisitions in contrast to the mergers route that followed previous slumps in crude prices.
According to global news agency Reuters, since late November, major oil companies have announced 11 deals worth more than $500 million each with a combined value of $31 billion, the clearest sign yet that oil executives are more confident a recovery is underway.
When crude prices collapsed in the second half of 2014, large oil firms slashed spending on exploration and production and offloaded assets to reduce debt so they could cope with lower revenue from oil and gas sales.
But with crude reservoirs declining at a rate of 10 percent a year in some cases, major oil companies are now looking to snap up assets to start growing again and there are plenty of smaller firms burdened with debt looking to sell.
Total acquisitions of oil and gas fields, known as upstream assets, tripled to $31 billion in December from a month earlier, when the Organization of the Petroleum Exporting Countries agreed to cut output for the first time in eight years, according to data from consultancy Energy Market Square.
Deals in the last month of 2016 alone accounted for nearly a quarter of total activity during the year. Read more….