The global upstream oil and gas industry exists on a large scale by any measure, producing 95 to 100 million barrels of crude oil per day. Although many oil & gas operations, particularly onshore the US, are small, most exploration activity involves huge tracts of land or seabed that need to be assessed. Once the exploration phase is concluded, the development of oil and gas fields in many cases requires massive investment, large equipment and significant manpower. Finally, the production, refining and distribution of refined oil products are in themselves large scale activities, involving hundreds of thousands of people and billions of dollars. That is why oil and gas companies not only grow to become very large organically, but in many cases they also decide to combine with other companies to ensure that adequate resources can be devoted to the development and operation oil and gas operations. Some of the biggest mergers and acquisitions have therefore been in the field of oil and gas or energy.
There are many examples of this activity. Sinopec, owned by the Chinese Government, has had a series of high profile oil and mergers and acquisitions in recent years. They took over Daylight Energy in Canada and Addax in Africa, and before that they took over Hainan Petro and Shengli.
Royal Dutch Shell is one of the biggest oil companies in the world, and so has been very active in the oil mergers and acquisitions space. In the 20th century they took over Mexican Eagle in Mexico and Solahart in Australia.In more recent developments, they have taken over BG Group in 2013, itself a significant companywith multiple interests across the globe, a move which shifted Shell’s asset base further towards gas.[look at Wikipedia] Another big name on this front is Exxon Mobil. They started off as Standard Oil of New Jersey but in the last 100 years they have expanded significantly in large part through oil and gas mergers and acquisitions. Later, in 1959, they merged with Humble Oil. The name Exxon was formally adoptedin the 1970’s from the combination of their two popular gas station brands Esso and Enco. The oil and gas M&A efforts continued in 1999 when they merged with Mobil Corp in a USD 73 billion deal, and in 2010acquired XTO which is focused on developing unconventional oil and gas assets.
In 2019, Chevron agreed to acquire Anadarko in a $49bn deal which expanded Chevrons shale-oil assets in the US Permian basin. This oil & gas takeover also gave Chevron a stake in the large LNG project offshore Mozambique.
Finally, the biggest name in Europe is BP, which is based in London. They have had a long history of oil and gas M&A across the world. Amoco, Standard Oil, Arco, and Burmah Castrol are some of the high profile acquisitions made by the group now known as BP. BP is also engaging in renewable energy M&A, having acquired in 2018 Chargemaster, the UK’s largest electric vehicle (EV) charging company, which has the UK’s largest public network of EV charging points, with over 6,500 across the country.
As you can see from the examples above, the need for substantial oil and gas investment as well as the need for oil and gas portfolio growth makes it desirable in many cases for companies to join forces with or acquire other companies. Kapok Capital provides dependable and expert advisory for international M&A transactions in oil & gas. We help buyers in conducting commercial due diligence and financial assessment of target companies. We can help design the bid strategy in an auction process. For companies seeking to engage in an oil & gas divestment process, we also have a series of disposal services o assist with oil & gas asset sales.