Global upstream mergers, acquisitions double in second quarter

The global mergers and acquisitions (M&A) upstream deal count nearly doubled in the second quarter, from a ten-year low in the first quarter, spurred by a resurgence in oil prices and a thaw in equity and credit markets, according to research prepared by IHS Herold Inc.

Offshore staff

NORWALK, Connecticut -- The global mergers and acquisitions (M&A) upstream deal count nearly doubled in the second quarter, from a ten-year low in the first quarter, spurred by a resurgence in oil prices and a thaw in equity and credit markets, according to research prepared by IHS Herold Inc.

The company reports that in the second quarter of this year, total transaction value increased four-fold outside North America, driven by strong activity in the Africa/Middle East region and upturns in Europe and Asia-Pacific. Total worldwide transaction value was flat at $28.4 billion, as first quarter figures were buttressed by the $20 billion Suncor/Petro-Canada merger, the company says. National oil companies represented nearly 40% of global deal value, including Sinopec’s $8.8 billion agreement to acquire Addax Petroleum, the largest overseas upstream transaction by a Chinese company.

“Both US onshore and international deal counts increased significantly, although North American activity remained well below historical averages,” says Chris Sheehan, IHS Herold director of M&A research. “International pricing for proved plus probable reserves held firm on stronger crude oil prices, but falling gas prices plunged North American asset deal prices to the lowest level since 2005. The upsurge in activity in the second quarter is encouraging, but the market is still extremely volatile.”

07/20/2009

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