Recently, some of the industry, said the downturn in oil prices will force a lot of debt to bear high oil and gas companies from the few buyers in the search for the target, to sell the company's assets, mergers and acquisitions opportunities will emerge. With the financing options to continue to reduce, the financial situation of the poor companies have to be stripped of assets, to seek partners in order to maintain the company's cash position. And the strong financial strength of the company will have the opportunity to obtain reserves, to achieve synergies of mergers and acquisitions.
 

Kearney, a consultancy in the latest release of the 2016 oil and gas industry mergers and acquisitions outlook "report pointed out, 2016 of all oil and Natural Gas Corporation are a crucial year, oil and gas companies hope through divestitures, mergers and acquisitions to achieve hard cost and capital expenditure reduction target. In addition, excess production capacity is expected to continue, and further structural reforms are both necessary and inevitable.
Industry mergers and acquisitions fell last year

According to statistics, in 2015, the oil and gas industry has only had a few notable significant transactions, such as the Royal Shell Holland Petroleum Corporation invested $81 billion 500 million acquisition of British Gas group. Middle reaches of the industry M & a growth of 68%, of which the largest transaction for the acquisition of Transfer Equity Energy Williams. Owners of limited liability partnership (MLP) of the largest proportion of mergers and acquisitions, accounting for more than half of the total amount of mergers and acquisitions.

However, in 2015 the total amount of the upstream mergers and acquisitions fell by 13%. If you do not consider the impact of Shell to $81 billion 500 million acquisition of British Gas Group's mega M & A transactions, the upstream M & a transaction volume decreased by up to 54%. Oil services in the field of total transaction volume decreased by 61%.

Kearney, partner, Asia Pacific Energy and chemical business department is responsible for people Lu Haowen (Thomas luedi) said: "2015 volume of mergers and acquisitions decline reflects the the oil and gas industry of the weak, causing the main reason for this situation is volatile oil prices and sluggish. In 2016, oil and gas companies and financial investors need to make a corresponding adjustment in order to adapt to the situation of low oil prices for a long time."
Asset sell-off will now

Insiders said that 2016 will be a very critical year, concerns about cash and liquidity will lead to higher costs and liabilities of oil and gas companies to sell assets. Kearney report said that burdened with high debt operators, especially on reserve loans (RBL) operators based on will face credit financing and reduce, to promote its inefficient assets to sell. This will be for those who are willing and able to take contrarian strategy and make full use of the innovation of the structure of the deal enterprise to bring a lot of opportunities. M & A transactions, regardless of is the acquisition, partnership or divestment will be added value and cut costs, to adapt to new market situation volatile in an important way.

Oil and gas companies, including part of the national oil company (NOC) can use the current environmental protection reserves or expand operations. Russia and Brazil's national oil companies have been focused on regional acquisitions, while China and other Asian countries, the national oil companies are more in favor of cross regional mergers and acquisitions, the development of international business. It is worth noting is that due to the poor performance of the crude oil market, China's national oil companies have send signals, said that in the short term interest of opportunistic acquisition of assets to be higher than the acquisition of the company's interest. With the re determination of debt contracts and debt will play a greater role in triggering M & A transactions, the stronger independent oil companies will have the opportunity to purchase assets at a very competitive price. Financial investors will also seek investment opportunities through a variety of M & A methods to set a different rate of return on investment objectives.

Report also pointed out that the international oil companies (IOC) will focus on structured reduced the investment portfolio and upgrade, to carry out selective acquisitions, continue to divestment plan. These plans will pay more attention to non conventional resources, rather than large mergers. For example, BP, Chevron and shell, etc. the company announced in the next few years will be sold a total of more than $450 billion in assets. According to the forecast, the geo political will on the M & A activities have a significant impact, because fiscal austerity will limit the merger and acquisition activity in the Middle East, and in China, opportunistic oil & gas performance is very good.