BAKU, Azerbaijan, July 17. Global upstream merger and acquisition (M&A) activity experienced a significant decline in early 2025, with deal values plunging 39% from the last quarter of 2024 to just $28 billion in 1Q2025, less than half the $66 billion recorded in the same period a year earlier, according to Rystad Energy, Trend reports.
Although some recovery occurred in Africa, Asia, and the Middle East, it was insufficient to offset North America’s dominant role, which accounted for 71% of deal value in the first quarter.
By mid-2025, upstream M&A deal value totaled just over $80 billion — a 34% drop year-on-year. North America’s share dropped to about 51% in the first half of the year due to a sharp decline in US shale oil transactions, despite rebounds in Oceania, South America, and Europe.
Rystad Energy highlights volatile oil prices, tariff uncertainties, increased OPEC+ production, and reduced US shale deals as key factors driving the slowdown. However, natural gas deals, particularly in US shale and Canada’s Montney region, showed resilience. Gas assets represented 62% of traded resources in Q1 and rose to about 82% in Q2, the highest share since 2019.
As shale oil consolidation cools in North America, companies are shifting focus. Rising valuations and scarce opportunities in the Permian Basin are pushing exploration and production firms toward other regions. Major transactions include Diversified Energy’s $1.3 billion purchase of Maverick Natural Resources and Citadel’s $1.2 billion acquisition of Paloma Natural Gas.
The outlook for natural gas remains strong. Companies like Chevron and Equinor are optimizing portfolios by divesting operated stakes and acquiring non-operated interests to reduce risk while maintaining exposure to the recovering US shale gas market, fueled by growing LNG projects and rising demand from data centers and AI power plants.
Canada’s upstream M&A also remained robust, with $11.9 billion in deal value in the first half of 2025, near its annual average. Key deals included Whitecap Resources’ $5.9 billion acquisition of Veren and CNRL’s purchase of Shell’s stake in the Athabasca Oil Sands Project.
International M&A activity fell 59% quarter-over-quarter to $8.3 billion in Q1 2025 but rebounded in the second quarter with increased activity in Africa, Asia, and the Middle East. Major deals included ADNOC’s bid for Santos and Repsol’s merger of UK North Sea assets with Nego Energy.
Looking ahead, Southeast Asia is emerging as a promising M&A region, driven by deepwater gas projects in Indonesia and Malaysia. Collaborations like Eni and Petronas’ planned joint venture and Pertamina’s interest in the North Ganal project reflect renewed regional activity.
Rystad Energy expects the global upstream M&A market to remain subdued for the rest of 2025 unless new developments alter the current trajectory.
