North American Gas Shale, Oil Sands Lead 2009 M&A Dealmaking

By: Margaret Ryan, Published: 03/08/10 11:30am

With the global recession presenting tempting opportunities, world energy companies responded with a 40 percent increase in mergers and acquisitions from 2008 to 2009, according to a study released today by IHS Herold.

Leading the M&A fervor were acquisitions of unconventional natural gas reserves and oil sands in North America, led by international firms, as many U.S. players were hindered by lack of credit. The world M&A total was $150 billion in 2009, and 65% of the total value was in North America. ExxonMobil's takeover of XTO, with its extensive unconventional gas reserves, represented $41 billion of that total. Suncor's merger with Petro-Canada created a company with large oil sands reserves, valued overall at $43 billion.

Elsewhere, national oil companies jockeyed with the international oil giants for access to new oil discoveries and snapped up smaller exploratory companies, IHS Herold said. Chinese state entities were especially active. About 15 percent of the deal value was in Russia, with other countries' national oil companies competing for resources. Africa saw 10 percent of the deal value, a new high for the continent.

IHS Herold predicted M&A activity would continue on the upswing this year, as the state-owned national oil companies and large multinationals compete for access to new discoveries.