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EY: Global oil, gas deal activity recovers from slow start

Oil&Gas Materials 1 February 2017 12:16 (UTC +04:00)
Global oil and gas deal value increased in 2016 to $395 billion from $340 billion in 2015, while deal volume fell by 27 percent year-on-year.
EY: Global oil, gas deal activity recovers from slow start

Baku, Azerbaijan, Feb.1

By Leman Zeynalova – Trend:

Global oil and gas deal value increased in 2016 to $395 billion from $340 billion in 2015, while deal volume fell by 27 percent year-on-year, according to the report released by Ernst & Young (EY) consulting company headquartered in London.

Transactions took a back seat to the more urgent task of adapting to new economic realities in the sector last year, said Andy Brogan, EY Global Oil and Gas Transactions Leader.

“Now, with the consensus throughout the sector that the worst is behind us, we’re starting to see a shift as companies realize that there may be a cost to inaction. We expect to see the momentum that began in the fourth quarter of 2016 continue in the year ahead,” he added.

Upstream deal value fell 14 percent to $130 billion in 2016 compared to $153 billion in 2015, according to the report.

This is while downstream deal value increased by 30 percent in 2016 to $65.9 billion from $51.5 billion in 2015.

EY believes that looking ahead, 2017 is expected to be a stronger year for downstream transactions, with deals motivated by the desire for upstream and downstream integration to create value.

“This year promises to mark a continuation of the transition from survival to value creation in the global oil and gas sector,” said Brogan.

Companies are very focused on delivering value but as investor attitudes change this will inevitably bring growth back into the picture, he added.

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Follow the author on Twitter: @Lyaman_Zeyn

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