According to IHS energy M&A research, the worldwide deal
count declined by 20% from the 10-year high in 2012, and
after a very sluggish first half of 2013, deal activity
accelerated during the second half of 2013. The transaction
value for global oil and gas M&A deals fell by almost
half to $136 billion (B), the lowest level since the 2008
Led by the Chinese national oil companies (NOCs), Asian and
Caspian regional NOCs were the buyers in half of the 10
largest deals globally in 2013. Following record high
deal value of more than $250 B in 2012, and more than $600 B
of acquisitions during 2010 to 2012, many companies pivoted
their focus to the development of acquired reserves,
resources and acreage, said Christopher Sheehan,
director of energy M&A research at IHS. However,
the total global upstream capital investment increased by
approximately 10% in 2013 due to the significant growth in
exploration and development spending.
The number of worldwide asset transactions fell by almost
15%, noted IHS, while the corporate deal count dropped by
50%. After several large corporate takeovers that exceeded
$10 B in 2012, no corporate mergers exceeded $5 B in 2013.
According to IHS research, offshore and conventional onshore
resources gained global M&A market share in 2013 with
offshore transactions accounting for four of the 10 largest
deals. However, spending on unconventional deals, said IHS,
plunged by more than half in 2013, to approximately $40 B.
Said Sheehan, Following record setting purchases of
more than $200 B on unconventional resources during the prior
three years, varied drilling results in emerging North
American basins made buyers more cautious in 2013. In
particular, overseas firms reduced their cross-border
purchases, and oil and gas companies concentrated on
exploiting the best performing areas of their vast
Unconventional resources, Sheehan added, were the primary
target in only one of the top 20 largest global transactions,
although Devons $6 B purchase of Eagle Ford assets from
privately held GeoSouthern Energy, was the largest global
transaction in 2013. Total US transaction value declined to a
five-year low in 2013, with corporate deal value falling to a
Thanks to persistent, low natural gas prices, the natural gas
percentage of acquired US reserves for the year hit a 10-year
low. US deal activity was predominantly in the Mid-Continent,
onshore Gulf Coast, and Rocky Mountain regions.
Unconventional resources represented half of the 10 largest
deals in the US.
IHS found that North American acquisitions represented only
three of the 20 largest deals during 2013. The North American
market share of worldwide transaction value fell to less than
45% from approximately 50% in 2012, as buyers sought access
to prolific international discoveries. Transactions in West
and East Africa more than doubled the market share of the
Africa and Middle East region to 15%, and spending in Latin
America also increased notably to 7%.
The Russia and Caspian region represented more than 25% of
the global total transaction value for the second consecutive
year, as Rosneft continued to expand its domestic holdings.
The combined value of transactions in Canada, Europe
and Asia totaled just above
15% of the global total, down from nearly 30% in 2012.
The oil and liquids percentage of acquired proved (1P)
reserves in North America and proved plus probable (2P)
reserves outside North America, excluding the Russia and
Caspian region, both remained near a 10-year high. Total
transacted 1P and 2P reserve volumes fell steeply, said IHS,
as there were no transactions in 2013 that approached
Rosnefts $60 B purchase of Russian producer TNK-BP in