Russia accounted for 10 percent of total worldwide mergers and acquisitions in the oil and gas exploration and production sectors, consulting firm Wood Mackenzie said in a report published Friday.
A total of $16 billion was spent on M&A by Russia firms, more than 10 percent of the total $150 billion worth of deals conducted in 2009, up significantly from the $2 billion spent in 2008, said Luke Parker, a researcher at Wood Mackenzie who contributed to the report.
The amount of spending moved back in the direction of its historical average last year, rebounding from a dearth of deals in 2008, which was not a very productive year worldwide, Parker said.
Russian investment in M&A in 2005, 2006 and 2007 amounted to $21 billion, $26 billion and $19 billion, respectively, he added.
"Russian national oil companies made an aggressive return to the M&A market in 2009, although activity continued to focus exclusively on domestic deals," the report said.
The largest deal by Russian companies in 2009 was Gazprom's $4.2 billion purchase of a 20 percent stake in Gazprom Neft from Italian energy major Eni in April, Parker said.
The second-largest M&A deal on the domestic market was Gazprom's acquisition of the 51 percent stake in Severenergia from Eni and Enel for $1.5 billion. As a result of the deal, Gazprom got control over Arcticgas, Urengoil and Neftegaztekhnologia — former gas assets of Yukos, which were acquired by Severenergia after Yukos' bankruptcy.
Globally, the largest upstream oil and gas deal by far was Exxon Mobil's acquisition of the U.S. gas producer XTO, the report said. The deal, valued at $41 billion, highlighted market participants' interest in unconventional gas resources — especially the growing shale gas segment.
A rebound in oil prices in 2009 played a key role in the recovery of the M&A market, the report said. Brent oil prices fell from a precrisis high of $147 per barrel in July 2008 to a low of $49 in February 2009, only to recover to $70 by May and stay above that level for most of the remainder of the year.
"Once the oil price hit the $70 per barrel mark, it was back in alignment with market valuations and industry consensus planning assumptions for the first time since late 2007," Parker said.
"It was this convergence that served to ease the disconnect between the price expectations of buyers and sellers, and to facilitate the rebound in deal activity witnessed during the second half of the year,” he said.
Ongoing oil-price stability will keep the market buoyant throughout 2010, though large-scale corporate consolidations are unlikely, the report said.
