Global Oil & Gas M&A Activity Slows Dramatically in 2025

In the first half of 2025, the global upstream oil and gas sector experienced a significant downturn in merger and acquisition (M&A) activity, with deal values declining by 34% year-on-year to just over $80 billion. This decline was particularly pronounced in North America, where the region's share of global deal value fell from over 70% to 51%.

Several factors have contributed to this downturn. A natural pause following recent large-scale consolidations, such as ExxonMobil's $60 billion acquisition of Pioneer Natural Resources, has led to a slowdown in deal-making. Additionally, volatility in oil prices and macroeconomic uncertainties stemming from U.S. tariff policies have made companies more cautious about engaging in new deals. Valuation discrepancies between buyers and sellers have also played a role, leading to delays or cancellations of potential transactions.

The decline in M&A activity was not uniform across all regions. While North America saw significant reductions, with the Eagle Ford shale basin experiencing a 58% decrease in M&A value and the Permian Basin seeing a decline of about 25%, other regions had varied experiences. Africa, Asia, and the Middle East also witnessed reductions in M&A activity. Conversely, Oceania, Europe, and South America saw increases, though these were insufficient to offset the overall global decline.

In contrast to the overall downturn, gas-focused deals surged due to strong demand for liquefied natural gas (LNG) and new gas power projects driven by the AI boom. U.S. shale gas areas like Marcellus and Haynesville saw deal values rise from $1.8 billion to $9.1 billion.

ExxonMobil's acquisition of Pioneer Natural Resources, completed in May 2024, significantly expanded its footprint in the Permian Basin. The merger combined Pioneer's more than 850,000 net acres in the Midland Basin with ExxonMobil's 570,000 net acres in the Delaware and Midland Basins, creating the industry's leading high-quality undeveloped U.S. unconventional inventory position. At the close of the deal, ExxonMobil's Permian production volume more than doubled to 1.3 million barrels of oil equivalent per day, based on 2023 volumes.

The Federal Trade Commission (FTC) approved ExxonMobil's acquisition of Pioneer but barred former Pioneer CEO Scott Sheffield from joining Exxon's board due to allegations of collusion with OPEC to increase crude oil prices. Sheffield has denied these allegations and filed a lawsuit against the FTC, claiming the agency overstepped its authority and violated his constitutional rights.

The current decline in M&A activity follows a period of robust consolidation in the U.S. shale sector, with approximately 17 consolidation-focused deals in 2024 compared to just three in late 2023. The slowdown in 2025 suggests that much of the sector's consolidation has been finalized, making a return to recent peaks unlikely.

The first half of 2025 has been marked by a notable decline in global upstream oil and gas M&A activity, influenced by a combination of post-consolidation pauses, market volatility, economic uncertainties, and valuation challenges. While certain regions and sectors, particularly gas-focused deals, have shown resilience, the overall trend indicates a cautious approach by industry players in navigating the current economic and geopolitical landscape.