Myles McCormick of the Financial Times writes about how a multi-billion dollar wave of consolidations has given ten companies control over more than 6.4mn barrels of oil, raising efficiency and lowering production costs. McCormick writes:
The shale revolution that began about 15 years ago saw a proliferation of thousands of small-time drillers turn the global energy order on its head and restored the US to the status of world’s biggest producer. Today, as a multibillion-dollar wave of consolidation washes over the Permian Basin — the engine room of America’s oil industry — that landscape has been transformed. A handful of heavy hitters is now firmly in control. Diamondback Energy’s $26bn deal for rival Endeavor Energy this week brought to almost $180bn the value of an oil and gas dealmaking spree that has reverberated across the US shale patch since the beginning of last year as big, publicly listed players swallowed rivals.
Today, as a multibillion-dollar wave of consolidation washes over the Permian Basin — the engine room of America’s oil industry — that landscape has been transformed. A handful of heavy hitters is now firmly in control. Diamondback Energy’s $26bn deal for rival Endeavor Energy this week brought to almost $180bn the value of an oil and gas dealmaking spree that has reverberated across the US shale patch since the beginning of last year as big, publicly listed players swallowed rivals. […]
Analysts do not expect the Federal Trade Commission to block any of the deals. But at some point, said Beeker, the continued concentration of control of America’s oil heartlands could “raise red flags”.
Read more here.
