Posted on Leave a comment

Oilfield service industry poised for greater consolidation this year

Speciality Gas Compressor Oils

According to a recent report, the oilfield service sector will see further consolidation in the coming months.

The Oil and Gas Industry Outlook for 2025 published by Deloitte expects more companies in the industry to consolidate, driven by incumbent U.S. President Donald Trump’s easing of regulations in the US oil and gas sector.

The increase in deals within the services sector is anticipated to follow a pattern of large-scale mergers between oil producers, like owner of Mobil lubricants ExxonMobil with Pioneer Natural Resources and Marathon Oil with ConocoPhillips.

Consultants at Deloitte predict that smaller sized oilfield enterprises could seek out favourable buyouts, as the size of their current customer base enters consolidation and shrinks after flagrant mergers and acquisitions (M&A) activity among upstream customers.

John England, global sector leader at Deloitte for oil, gas and chemicals commented in a 2024 interview:

“We think the new administration could be positive for M&A, and that we will see a little more loosening around that because it was getting more difficult to get M&A done the last few years.”

US legislators have pursued increased scrutiny of multi-billion-dollar deals from the Federal Trade Commission (FTC). Gas producers Southwestern Energy and Chesapeake Energy postponed a $7.4 billion merger following an FTC request for further information in spring 2024. The firms closed their deal in autumn.

Similar FTC requests fell on Pioneer Natural Resources and Exxon regarding their merger valued at $60 billion.

England added that a more fragmented market and loosening of the administration has greater potential for consolidation.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.