2024 outlook

Upstream M&A: more big deals in 2024?

The US Majors made two huge upstream acquisitions towards the end of 2023, creating a frenzy of speculation as to how competitors will react. Read our predictions in Global upstream M&A: 4 things to look for in 2024.

In the full report:

  • Another banner year for M&A
  • What will the buyers sell?
  • Euro Majors and NOCs back in the game
  • What way do valuations break?

2 minute read

Big M&A has been the talk of the upstream industry since the US Majors announced blockbuster bids for Pioneer and Hess. All eyes are now scanning the horizon for the next big story.

So, are there more mega-deals in the offing? Will the Euro Majors follow their US peers’ example? Will there be opportunities for independents if acquirers prune portfolios? We’ve drawn on insight from Lens Upstream to pull together our predictions for the year ahead. Fill in the form for a complimentary copy of Global upstream M&A: 4 things to look for in 2024 – and read on for a brief introduction.

Expect another banner year for upstream M&A

Corporate consolidation will continue to dominate upstream M&A in 2024 – our Deal Pipeline is stacked with potential multi-billion-dollar deals. (The Deal Pipeline captures rumoured and potential transactions and is part of our M&A Tool, exclusively available to M&A Service subscribers.)

There’s no unifying theme across these deals. But one motivating factor is the increasing importance of scale. This has been a driving theme for years as companies look to lower costs, boost operational efficiency and improve cost of capital by accessing cheaper debt and equity.

That last point has become glaring in recent months, particularly in the US. Bigger companies are achieving better market ratings. The recent mega-deals will only amplify that discrepancy by making the biggest companies even more attractive.

Read the full report for a look at some of the deals that could grab the headlines this year.

Recent acquirers will prune portfolios – providing opportunities for regional E&Ps

Corporate consolidation will boost the asset market as buyers high-grade portfolios once acquisitions have closed.

Chevron has announced that it will seek US$10-15 billion of disposals over the next five years, following its acquisition of Hess. ExxonMobil hasn’t yet stated a new divestment target, but a similar path is likely.

Read the full report for charts on the strategic fit of ExxonMobil and Chevron’s upstream portfolios, and a look at the opportunities that disposal programmes could provide for regional Independents.

Euro Majors and national oil companies (NOCs) to step up activity?

The Euro Majors are back in the market for larger upstream assets. This looked unlikely in 2021, when accelerated diversification into low carbon seemed to be the central strategy. Nonetheless, in 2023 the peer group spent more on upstream acquisitions than in the prior three years combined. Could that spend trend higher still in 2024? And what do we expect from the NOCs?

For more on this, plus a look at valuations across markets and themes, read Global upstream M&A: 4 things to look for in 2024 in full.

Fill in the form at the top of the page for your copy.

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