From Woodside to Aramco, Big Oil’s Next Merger Mania Has an Eye on Its Demise - Bloomberg

From Woodside to Aramco, Big Oil’s Next Merger Mania Has an Eye on Its Demise - Bloomberg

Is a barren year for oil industry deal activity finally coming to an end?

So far there’s been $86 billion of takeovers announced, pending or completed, according to data compiled by Bloomberg. If things continue at those rates through December, it will be one of the most lackluster years for energy deal-making in two decades.

Hope is on the horizon. Saudi Arabian Oil Co. is finally growing close to an equity swap with Reliance Industries Ltd. after years of gestation, people with knowledge of the matter told Bloomberg this week. Meanwhile, BHP Group announced plans Tuesday to merge its oil and gas business with Woodside Petroleum Ltd. in a share-based deal that would see the mining company quit the petroleum sector and roughly double Woodside’s output. With the first valued at an estimated $20 billion to $25 billion and the latter worth about $15 billion at Woodside’s current share price, that would instantly increase the year’s tally by almost half.

Don’t take that for a sign that animal spirits are picking up in the industry. Although crude prices touched a three-year high last month and cash is once again flowing freely, this wave of deal activity doesn’t suggest an industry gearing up for a rally in demand.