How forced change will accelerate seismic shifts in future upstream acquisition and divestiture strategies?

The acceleration of the pace of the energy transition and a myriad of accelerants have a consequential impact on the upstream M&A market and the strategic decisions that companies are being forced to undertake.

Russia's recent invasion of Ukraine is the latest accelerant of forced change that has caused companies to react, including making momentous divestiture decisions related to substantial upstream holdings.

In addition to revolutionary geopolitical crises, upstream players have had to grapple with other external evolutionary transformative forces that have included a global pandemic, investor-driven shifts in business models, extreme volatility in commodity prices, and a quickening evolution to a lower-carbon future, which have in combination created unparalleled pressure for companies to urgently decide whether to be reactive or proactive in their M&A strategies as they navigate the energy transition.

How far and how fast do companies need to move? What strategies will global integrated oil companies (GIOCs), NOCs, independent E&Ps, PE players, and new entrants undertake to transform the upstream M&A landscape?

As companies simultaneously react to fast-changing market conditions, we believe that the upstream acquisition and divestiture marketplace can also act as a proactive accelerator for companies to seismically transform their portfolios in a complex, rapidly evolving global energy industry.

Watch the 'Global Upstream M&A Review and Outlook 2022' webinars to find out more about the strategies companies undertake to transform the upstream M&A landscape in these volatile times.

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Posted 30 March 2022 by Christopher Sheehan, Executive Director, Transaction Research, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.