Lukoil’s President Vagit Alekperov said at Monday’s IHS CERAWeek gathering that he expects major mergers and acquisitions in the global oil and gas industry in the near future.
According to Lukoil’s President, the largest oil and gas companies "will be in the center of the structural changes in the global oil industry in the near future, including the area of mergers and acquisitions," TASS cited him.
The period of low oil prices at the end of the last century also started a process of mergers and acquisitions, which led to the emergence of 'super majors'. BP, Chevron, Exxon and Total carried out a number of transactions in 1998-2002, which allowed them take advantage of effective expansion of business, Alekperov reminded.Sberbank CIB analyst Valery Nesterov told Vestnik Kavkaza that mergers in the oil industry are not a new thing, and they have intensified due to the fact that oil prices have intensified, and assets have fallen in price."Many small and medium-sized companies, which are experiencing financial difficulties, are forced to merge. The largest deal – to $70 billion – is the association of Shell and British Gas. Basically, this process will take place in the US, in my opinion," the expert said."We do not have many Russian companies, and major mergers have already taken place: you know, the changes in the structure of shareholders of Rosneft, NKBP and Bashneft. We certainly do not expect any major mergers and acquisitions," Valery Nesterov stressed.As to the question of how these processes will affect the price, the expert noted that optimization is always useful, and oil money will be used more efficiently."It will inhibit the growth of costs, and will reduce costs in some cases. At the same time, the share of excess oil produced by inefficient companies will be removed from the market. As a result, it should contribute to the stabilization of the situation in the world market, to its balance and to the stabilization of oil prices – this is one of the main factors," the analyst concluded.A senior analyst of 'Uralsib Capital', Alexei Kokin, said that mergers in the oil and gas industry are unlikely to benefit the industry."World industry experienced these processes in the late 90s, when several large companies merged, such as Exxon and Mobil. In principle, I think, it will affect small companies – well, it is clear that in the United States, for example, there are hundreds of small companies which may merge – or it will be a negative phenomenon, which will lead to the creation of super-giants, which are poorly managed. The problem of large companies is an efficiency problem," the expert said.
The period of low oil prices at the end of the last century also started a process of mergers and acquisitions, which led to the emergence of 'super majors'. BP, Chevron, Exxon and Total carried out a number of transactions in 1998-2002, which allowed them take advantage of effective expansion of business, Alekperov reminded.
Sberbank CIB analyst Valery Nesterov told Vestnik Kavkaza that mergers in the oil industry are not a new thing, and they have intensified due to the fact that oil prices have intensified, and assets have fallen in price.
"Many small and medium-sized companies, which are experiencing financial difficulties, are forced to merge. The largest deal – to $70 billion – is the association of Shell and British Gas. Basically, this process will take place in the US, in my opinion," the expert said.
"We do not have many Russian companies, and major mergers have already taken place: you know, the changes in the structure of shareholders of Rosneft, NKBP and Bashneft. We certainly do not expect any major mergers and acquisitions," Valery Nesterov stressed.
As to the question of how these processes will affect the price, the expert noted that optimization is always useful, and oil money will be used more efficiently.
"It will inhibit the growth of costs, and will reduce costs in some cases. At the same time, the share of excess oil produced by inefficient companies will be removed from the market. As a result, it should contribute to the stabilization of the situation in the world market, to its balance and to the stabilization of oil prices – this is one of the main factors," the analyst concluded.
A senior analyst of 'Uralsib Capital', Alexei Kokin, said that mergers in the oil and gas industry are unlikely to benefit the industry.
"World industry experienced these processes in the late 90s, when several large companies merged, such as Exxon and Mobil. In principle, I think, it will affect small companies – well, it is clear that in the United States, for example, there are hundreds of small companies which may merge – or it will be a negative phenomenon, which will lead to the creation of super-giants, which are poorly managed. The problem of large companies is an efficiency problem," the expert said.
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