Stable oil prices and one mega deal between Occidental Petroleum and Anadarko Petroleum resulted in 2019 seeing the highest annual M&A spend for upstream assets worldwide since the price downturn took hold in late 2014.
This is according to Evaluate Energy data released in a new report supported by Deloitte, which analyses global M&A activity in the upstream sector in 2019. The full report can be downloaded at this link.
Deals agreed in the upstream sector combined to reach a total of $176 billion during 2019, which is 31% higher than the $134 billion reached during 2018.
The high spend comes in a year of stable oil prices; WTI traded in a narrow band of less than a $20 difference between the year high and low. The 2019 WTI price never dropped as far as the low of 2018, but it also didn’t reach the high of 2018 and overall the average was lower in comparison; WTI averaged $57 during 2019, 13% lower than the 2018 average price of $65.
The total spend was, however, skewed by the $55 billion acquisition of Anadarko Petroleum by Occidental Petroleum and the resulting sale by Occidental of Anadarko’s African assets to Total for $8.8 billion. Without the initial acquisition of Anadarko by Occidental, the 2019 deal total would have actually decreased by $22 billion in comparison to 2018.
Evaluate Energy’s full 2019 global upstream M&A review can be downloaded at this link.
Included in the report:
- Deals for U.S. assets dominate global deal value, while Canada sees record lows
- Details on six major Permian Basin deals to be agreed in 2019
- A focus on Latin American deals, including Total’s $5.1 billion deal in Suriname
- Analysis on maturing assets worldwide being sold off to private companies