Mergers and acquisitions have always been a big part of the oil and gas business, but the sector is in the midst of a particularly intense consolidation. Historically, the reason is simple. As a company’s reserves decline, there are only two ways to replenish: either new exploration or buying the stuff that someone else found.
The recent run of tie-ups starting has been amplified by the industry’s windfall profits. S&P Global Market Intelligence reports the value of oil and gas deals topped $271 billion in 2023, double the previous year. Some of the biggest of these deals will aim to be finalized in 2024.
Some worry that mega mergers are a bet against the energy transition. But the truth might be more complex. ExxonMobil and Chevron may have “turbo-charged their own fossil fuel output,” but simply moving it from one company to another won’t change global…
Read the full article originally published at business.edf.org.