Mergers and acquisitions in the oil and gas industry tripled in value last year to $160 billion (€133 billion) - the highest level since the boom year of 1998 when Exxon and Mobil merged, BP took over Amoco, and Total bought PetroFina.
Deals by Chinese oil and natural gas companies meanwhile are expected to have grown sixfold to $6 billion in 2005 as they bought assets from Ecuador to Sudan and Syria, according to an authoritative industry study.
The report, released tomorrow, suggests oil industry executives and government leaders have been on a frantic global buying spree, under rising pressure to secure the oil and gas needed to fuel economic expansion.
The study by Harrison Lovegrove, the UK-based corporate advisers, and John S Herold, the US research firm, is widely regarded by the industry as the most comprehensive report on M&A activity in the sector. It is expected to show that last year oil companies were willing to pay 54 per cent more for acquisitions in North America as executives gambled that high oil prices were here to stay. Acquisition prices in the rest of the world shot up 350 per cent.
Excluding the former Soviet Union, prices outside North America jumped 155 per cent. But the highest prices were attracted by Canada because of its political stability and favourable tax environment.
The report found that more than 240 deals had been struck worldwide, a 40 per cent jump from the preceding year.
Much of the activity was among publicly traded companies. It included Chevron's $20 billion purchase of Unocal and ConocoPhillips's $36 billion Burlington Resourcesacquisition.
The companies being snapped up were mainly mid-sized - too big for modest drilling successes to deliver good growth results but not large enough to compete with national oil companies or to venture into tough new terrain.
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