Oil & gas sector gearing up for more M&A deals

Singapore

AFTER a fairly quiet start to 2015, a majority of oil and gas companies are gearing up for more merger and acquisition (M&A) deals in the later half of the year, with an increased focus on middle-market transactions, based on a survey conducted by Ernst & Young (EY).

Of the 112 global executives surveyed in EY's 12th biannual Oil & Gas Capital Confidence Barometer, 60 per cent of the respondents expect to complete at least two M&A deals this year, while 56 per cent of the executives expect to actively pursue acquisitions - more than double the figures (25 per cent) recorded in the October 2014 survey.

Andy Brogan, EY's global leader of oil & gas transaction advisory service, said in a note that the sudden and steep drop in oil prices had forced many companies, particularly those in the upstream and oilfield services, to aggressively cut spending and costs. "Transaction opportunities in the form of mergers and divestments have been delayed by uncertainty over oil price outlook. Now these acquisition opportunities, coupled with increased confidenc…