The State of Mergers, Acquisitions and Divestitures in Upstream, Midstream and Downstream

The state of mergers, acquisitions, and divestitures in the oil and gas industry reflects a dynamic landscape influenced by various factors both globally and within the United States. In the upstream segment, oil and gas majors have been actively pursuing acquisitions, with notable players like Exxon Mobil, Chevron, and Occidental Petroleum leading the charge. These acquisitions, which accounted for a significant portion of total deal value in the energy, natural resources, and chemicals sectors, have primarily focused on securing assets in strategic locations such as West Texas, North Dakota, and Guyana’s coast. The midstream and downstream segments are witnessing a mix of consolidation and strategic divestments, particularly in response to evolving market dynamics and regulatory shifts. Mergers and acquisition deals, however, face hurdles due to valuation gaps and uncertainties surrounding capital returns from existing investments.

Globally, the oil market outlook is characterized by cautious optimism amid ongoing OPEC+ production cuts, leading to reduced forecasts for global oil production growth in 2024. This reduction in growth, coupled with falling inventories, is expected to drive up Brent crude oil spot prices. In the United States, retail gasoline prices are projected to rise, largely driven by higher crude oil prices, while natural gas prices are expected to remain relatively low.

On Monday, April 15, 2024, Godswill joined with the Federal Reserve Bank and leading experts in energy and finance to discuss insights about the unfolding dynamics and the transaction opportunities they present.

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