January 04, 2013 12:52 ET

A Record $254 Billion in Oil and Gas M&A Deals in 2012

Currently Over $85 Billion of Assets on the Market

HOUSTON, TX--(Marketwire - Jan 4, 2013) - PLS Inc. in conjunction with Derrick Petroleum Services reports that Global M&A activity for upstream oil and gas deals in 2012 totaled $254 billion in 679 deals. The dataset is from their industry leading Global M&A Energy Transactions Database and includes all upstream oil and gas deals with values disclosed.

According to Brian Lidsky, Managing Director with Houston-based PLS Inc., "Total deal value in 2012 surged 50% higher versus 2011 to a record $254 billion, eclipsing the prior record of $212 billion in 2010. However, during 2012, three mega deals accounted for $97 billion or 38% of the total; Rosneft's $62 billion acquisition of TNK-BP, CNOOC's $18 billion acquisition of Nexen and Freeport-McMoRan Copper & Gold's $17.2 billion buy of Plains E&P. Excluding these mega-deals, 2012's activity in terms of deal value is on par with the prior five-year annual average of $160 billion of deal activity annually. Also, during Q4 2012, we witnessed an unusually high level of deal activity totaling $137 billion in 181 deals as many sellers were motivated to complete deals in advance of the uncertainties surrounding the second term of President Obama and the implications of US governmental policy changes regarding the fiscal cliff."

Also helping the 2012 record deal making was oil price stability. Not surprisingly, WTI oil prices remained remarkably stable in 2012 and nearly mirrored the 2011 price path and remained in a band of $80 to $110 per barrel.

Activity in 2013 is expected to track back to normal as growing oil supplies, particularly in the North American market, have a number of analysts expecting oil prices to maintain current levels or trend lower. The market has a healthy level of inventory as currently we are tracking over $85 billion of assets for sale where the estimated deal value is greater than $100 million.

Chinese and other Asian NOCs remain on a global buying spree to shore up long term supply. Yashodeep Deodhar, Managing Partner, Derrick Petroleum Services, aptly points out, "China's thirst for buying global oil and gas assets is continuing unabated highlighted by CNOOC's landmark $18 billion acquisition of Nexen Inc. Following the bid for Nexen, Chinese companies continued buying; including Sinopec's $2.5 billion purchase of Nigerian assets from Total, PetroChina's $2.2 billion joint venture for unconventional assets in Canada with Encana, CNOOC's $2.0 billion buy of additional interest in QCLNG project in Australia from BG and PetroChina's $1.6 billion buy of an interest in Browse LNG project also in Australia from BHP Billiton." Other large Asian NOC's buying in 2012 include ONGC spending $5 billion for an interest in the Kashagan field in Kazakhstan from ConocoPhillips and $1 billion for an interest in the ACG field in Azerbaijan from Hess, Petronas acquiring Progress Energy in Canada for $5.8 billion and PTTEP outbidding Shell to acquire Cove Energy for $ 1.8 billion.

  Table 1  
  Global Oil and Gas Deals   
  2007 to 2012 Totals  
Year   Deal Count   Value ($B)
2012   679   $254
2011   842   $170
2010   684   $212
2009   477   $150
2008   510   $117
2007   479   $155

In 2012, 46 deals of $1 billion or greater were inked, representing a total of $191 billion or 75% of the market. This compares to 2011 which saw 37 deals of $1 billion or greater ($107 billion) representing 63% of the market. Of these large deals, 63% were for conventional assets, up from 49% in 2011.

Table 2
Global Oil and Gas Deals
Top 5 in 2012
Month   Buyer/Seller   Value ($B)   Country
Oct.   Rosneft/BP and Alfa Group   $61.6   Russia
July   CNOOC/Nexen   $17.9   Canada
Dec.   Freeport-McMoRan C&G/Plains E&P   $17.2   United States
Feb.   Apollo et al/Kinder Morgan   $ 7.2   United States
June   Petronas/Progress Energy   $ 5.8   Canada

Globally, the United States continues to lead upstream oil and gas deal activity with 33% of deal value followed by the Former Soviet Union and Canada. According to Mangesh Hirve, Director, Derrick Petroleum Services, "Outside of North America, Rosneft's purchase of TNK-BP in Russia for $62 billion marked the second largest oil and gas deal recorded, behind Exxon's $82 billion purchase of Mobil in 1998. Other global hotspots besides Russia (15 deals) include the North Sea (40 deals), Australia (22 deals) and Colombia (14 deals)."

Table 3  
Global Oil and Gas Deals   
2012 Totals by Region  
Region   Deal Count   Value ($B)
United States   299   $83
FSU   23   $75
Canada   194   $50
Australia   24   $13
Europe/North Sea   51   $12
Africa   29   $10
South America   30   $ 5
Asia   18   $ 4
Middle East   11   $ 2
  Total   679   $254

Corporate M&A activity, as opposed to asset purchases and joint ventures, represented 58% of global deal value in 2012, up from a 47% share in 2011. The high water mark for corporate M&A activity remains at 73% seen in 2009 during a time when the global equity markets fully supported financing corporate takeover activity.

As of January 1, 2013, the tally of upstream oil and gas assets for sale stood at over $85 billion. New large deals in the pipeline recently announced include ExxonMobil's intent to sell 60% of the West Qurna-1 oilfield in southern Iraq, Murphy Oil selling select Canadian assets, and Total continuing a global non-core divestiture program.

Looking forward, PLS and Derrick expect the deal flow for oil and gas transactions to moderate from the year-end 2012 rush. Forces that will impact global deal making in the coming year include multi-year lows in North American gas prices that many believe have stabilized, a growing oil production profile in North America, a return to normal in the Gulf of Mexico, large and high-impact discoveries in East Africa, continued buying by Asian and Chinese firms especially to secure LNG feedstock, and political unrest in the Middle East.

PLS and Derrick will be issuing a full study with further analysis of the 2012 Global M&A markets by mid-January.

PLS Inc. and Derrick Petroleum Services are partners in providing U.S., Canadian and International clients with an industry leading Global and U.S. M&A database and related services. These databases are maintained 24/7 by a team of analysts and are accessible via the web.

PLS Inc.
Derrick Petroleum Services

Contact Information

  • Media Contact:
    Brian Lidsky
    Managing Director
    PLS Inc.
    Email Contact

    Mangesh Hirve
    Derrick Petroleum Services
    Email Contact