EY: The global value of transactions in the oil and gas sector decreased in 2019 amid debates on energy transition

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The global volume and value of transactions in the oil and gas industry decreased by 18.4% and 10.8% respectively in 2019, as the stagnation of commodity prices, disappointing results and low yields that made this sector record a capital shortfall. According to the EY Global oil and gas transactions review 2019 report, the volume and values of the transactions largely reflected the phenomenon of rebalancing portfolios by distancing themselves from upstream oil assets and focusing on downstream and gas assets.

The value of transactions in the upstream segment increased by 17.6% in 2019. However, if the two largest transactions are excluded, the value decreased by 32% compared to 2018, and the volume of transactions decreased by 37% in the same period.

The total number of transactions decreased by over 20%, while the average value of the transactions was of USD 122 million, a level similar to the previous year. Thus, the tendency to decrease the value and volume of transactions, which started in 2017, was maintained, when interest in what was believed to be undervalued assets reached its peak.

The value of transactions in the downstream segment increased by 43% to nearly USD 124 billion in 2019. However, if the largest transaction is excluded, the value decreased by 31% and the volume, by 10%. Trading activity in North America and Europe went down by 70%, from nearly USD 80 billion in 2018, to USD 24 billion in 2019. The number of transactions decreased by 15% from 137 in 2018, to 117 in 2019.

In the oil services sector, prices have remained extremely low since 2014, and profits have plummeted. The value of transactions decreased by almost 27% in 2019 compared to 2018. The volume of transactions registered a similar contraction, decreasing by almost 20%.

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