Merger mania goes midstream in oil and gas sector

After a flurry of major M&A deals in the upstream segment last year, cash-rich companies are making moves a little further up the value chain

There is still a degree of merger and acquisition (M&A) activity in the oil and gas sector. However, it has retreated slightly, and is shifting from the upstream to the midstream segment, with China is facing more competition for assets from other Asian players. A slowdown in the pace of energy M&A follows a flurry of activity towards the end of 2011. Weaker prices for oil and gas and persistent worries about the effect of the Eurozone’s sovereign-debt crisis – and its impact on global energy demand – have taken a toll, affecting companies’ ability to raise finance for transactions. According Deloitte, a consultancy, the total industry deal count fell to 231 in the first half of 2012