The oil and gas industry went on a $250 billion buying spree in 2023, taking advantage of companies' high stock prices to secure lower-cost reserves and prepare for the next upheaval in an industry likely to undergo more consolidation.
A surge in oil demand as world economies shook off the pandemic downturn has stoked acquirers' enthusiasm. Exxon Mobil (XOM.N), Chevron Corp (CVX.N) and Occidental Petroleum (OXY.N) made acquisitions worth a total of $135 billion in 2023. ConocoPhillips (COP.N) completed two big deals in the last two years.
The grand prize in this dealmaking is the largest U.S. shale-oil field, the Permian Basin in west Texas and New Mexico. The four companies are now positioned to control about 58% of future production there.
Each aims to pump at least 1 million barrels per day (bpd) from the oilfield, which is expected to produce 7 million bpd by the end of 2027.
And more transactions are on the horizon. Three-quarters of energy executives polled in December by the Federal Reserve Bank of Dallas expected more oil deals worth $50 billion or more to pop up in the next two years.
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