Report: Global Upstream Sector Eyes $150 Billion in Deals for Rest of 2024

(Reuters) — The global upstream industry could see dealmaking worth another $150 billion throughout the remainder of the year, with focus shifting to shale plays in U.S. other than the Permian Basin, analysts at Rystad Energy said in a report.

M&A activity in the global upstream industry has already crossed the $64 billion mark this year, most of it focused around the U.S. shale patch.

Why Its Important

M&A activity in the first-quarter in North America was nearly $54 billion, or 83%, of the worldwide total and the region is expected to be the driving force for consolidation for the rest of the year, the report said.

The Context

The Permian Basin, which spans across western Texas and southeastern New Mexico, has been the focus for most deals in the year, with companies vying to get a hold of assets located in the patch.

Other shale plays in the U.S. are also set to attract significant investments, with about $41 billion worth of non-Permian opportunities on the market, according to the report, like the potential sale of Exxon Mobil's Bakken portfolio in North Dakota.

By The Numbers

Globally, dealmaking in the sector increased 145% year-over-year (y-o-y) in the first-quarter to $64 billion, and was the highest since 2019, per the report.

Outside the U.S., dealmaking remained strong in the first quarter, with $10.5 billion changing hands, a 5% y-o-y increase. The demand for gas-producing resources represented about 66% of total oil and gas producing assets bought and sold.

Key Quotes

"...with appetite still strong, deal-hungry players are looking outside the (Permian) basin for acquisitions. A power shift could be on the cards, with non-Permian assets taking center stage in the future North American deals pipeline," said Atul Raina, vice president of upstream research at Rystad Energy.

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