Around $86 billion of takeovers have been announced, completed, or pending in the oil and gas industry so far this year, Bloomberg reported. If things continue at the current rate, 2021 would be one of the most lacklustre years for the sector’s deal-making in twenty years. Saudi Aramco is near to signing an all-stock deal to acquire 20% of Reliance industries’ oil-to-chemical business, while BHP has announced it would sell its oil and gas operations to Woodside.
The Aramco-Reliance deal could be worth $20 billion to $25 billion, while that of BHP and Woodside will be around $29 billion. These two deals could increase this year’s deal tally by more than half. The deal activity in the sector appears to be picking up thanks to a recent rally in oil prices. However, analysts said that it would not signify that the energy industry is gearing for a rally in mergers and acquisitions.
Last week, the Intergovernmental Panel on Climate Change said the world is warning at a faster pace than previously forecast and would likely surpass the threshold of 2°C in this century without a deep cut in emissions. Meanwhile, the International Energy Agency predicts that renewable power investment will surpass that in petroleum for the second year running. More investors have also sought to decarbonize their portfolios.
