Upstream M&A activity expected to slow significantly in 2025, Rystad says

Feb 3 (Reuters) - Global upstream merger and acquisition (M&A) activity is expected to slow significantly in 2025, following two years of consolidation in U.S., Rystad Energy said on Monday.

WHY IT'S IMPORTANT

In 2024, the M&A deal value in Europe decreased by around 10% year-on-year, according to the report.

Rystad says: "Despite $8 billion worth of upstream opportunities in the region, the outlook for future M&A activity in Europe remains uncertain due to fiscal policy in the UK."

However, the report said that North America is still a leader in M&A activity and will continue to play a key role in maintaining the market's health.

CONTEXT

The consolidation wave in the U.S. energy sector, which triggered $250 billion worth of deals in 2023, had stretched into 2024 but has seen a slowdown since the end of last year.

BY THE NUMBERS

"North America will continue to lead global M&A activity, driven by nearly $80 billion in upstream opportunities on the market," the report said.

The Middle East is rapidly emerging as a significant center for M&A activity. Bolstered by liquefied natural gas expansion plans, the region recorded its second-highest year of M&A activity since 2019, with deal value reaching nearly $9.65 billion in 2024, Rystad said in the report.