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‘North Sea, Canada lead M&A activity’ - report

US upstream asset deals slow down, but next round of private equity-led moves ‘on the horizon’, say analysts

The North Sea and Canada have led the activity in the upstream mergers and acquisitions (M&A) sector so far this year, as deals in the US have slowed down, according to analysts from global consultancy 1 Derrick.

Global oil and gas M&A activity between the first and third quarter of the year has reached $122 billion, with another $8.4 billion from transactions with undisclosed value, according to 1 Derrick estimates.

In the first and second quarters of the year, activity was driven by Canadian oilsands deals totaling around $24 billion, and $18 billion of North Sea deals. In the third quarter, international M&A activity surged to $25 billion.

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These include Centrica-Bayerngas, $3.3 billion, Norway, in the third quarter, Point Resources-ExxonMobil, $1 billion, Norway, in the first quarter, and ONGC-Rosneft, $510 million, Russia, in the second quarter.

“Out of 15mMega deals announced in the year to date, seven are in North Sea and two in Canada,” 1 Derrick said.

However, upstream M&A in the US slowed down sharply, totaling $52 billion, on the back of a strong first and second quarter, but dropped to $8 billion in the third quarter, and “deal counts for large and mega deals in US continue to fall,” 1 Derrick said.