Time for financial discipline

The pattern of consolidation and restructuring among oil companies during the past year looks set to continue

As 2017 ends, it is on track to go into the history books as a year of moderate recovery for the world oil industry: Opec output is broadly stable; the global inventory overhang is broadly shrinking; and oil prices are up nearly 13% from their January level. The combination triggered a broad recovery in oil investment activity across all sectors as companies consolidated both their upstream and downstream positions, many repeating a popular mantra: value over volume. According to Deloitte Touche Tohmatsu's Oil and Gas Mergers and Acquisitions Report-Mid-Year, 2017, global energy M&A activity was up 57% in the first half of this year, to $137bn. The US Energy Information Administration re