Despite a rebound in Oceania, South America, and Europe in the second quarter, the overall decline continued. Rystad Energy forecasts a persistent downturn, except for US shale gas, due to macroeconomic volatility and commodity price uncertainty.
Upstream M&A activity plunged 39% in the first quarter of 2025, falling from $66 billion in the same period a year earlier to $28 billion. North America’s dominant market share dropped to 51% by the first half of 2025 due to a 34% decline in deal value compared to the first half of 2024, mainly due to US shale oil transaction slowdowns.
The global pipeline of potential energy deals started 2025 strong at $150 billion but shrank to $119 billion by July, with total deals announced in the first half reaching $80 billion due to volatile oil prices and tariff uncertainties. Gas deals, particularly in US shale and Canada’s Montney region, held up well, with 62% and 82% shares of traded resources in the first and second quarters, respectively.
US shale consolidation appears to be nearing its end, with oil price volatility hindering market opportunities. However, the natural gas market saw a significant rebound in early 2025, with deal values surging 30% in the first quarter and gas accounting for 62% of traded resources. Companies are adjusting strategies to optimize portfolios, with Chevron divesting its East Texas gas assets and Equinor acquiring EQT’s Marcellus stakes to focus on core expertise and manage risk.
In Canada, upstream M&A reached $11.9 billion in the first half of 2025, matching the annual average from 2019 to 2024. Notable deals included Whitecap Resources’ $5.9 billion acquisition of Veren and CNRL’s purchase of Shell’s Athabasca Oil Sands stake. Strathcona Resources divested its Montney assets and proposed a takeover of MEG Energy.
International M&A fell 59% to $8.3 billion in the first quarter of 2025, primarily due to slower dealmaking in Europe, Oceania, and South America. However, a rebound in Africa, Asia, and the Middle East tempered the decline. International deal value for the first half of 2025 rose to $39.5 billion, a 37% year-over-year increase, driven by major transactions such as ADNOC subsidiary XRG’s bid for Santos and Repsol-Nego Energy’s merger to form Neo Next Energy.
Southeast Asia is becoming a promising area for M&A, with renewed interest in deepwater gas projects in Indonesia and Malaysia. Eni and Petronas are planning a joint venture, and Indonesia’s Pertamina is reportedly eyeing stakes in the North Ganal project. Global M&A activity is expected to slow for the rest of the year unless an unexpected development occurs.
/Rystad Energy/