Big oil’s huge losses raise prospect of mega mergers

Big oil’s huge losses raise prospect of mega mergers

When Exxon struck the biggest deal of a $300bn wave of oil mergers during the brutal late-1990s crude price collapse, Mobil chief executive Lou Noto gave a warning to the industry.

"We need to face some facts,“ he said as he announced his company's takeover. "The world has changed, the easy things are behind us. The easy oil, the easy cost savings, they're done. So all of us are now looking for some way to make a jump.“

Now the finances of the supermajors those deals created are in tatters, just as the rise of clean energy and doubts about long-term oil demand force another existential reckoning “” and the prospect of megamergers is on the cards again.

"We've had two price crashes in the last five years and we've seen a lot of money leaving the sector,“ said Greg Aitken, head of mergers and acquisitions research at the consultancy Wood Mackenzie. "We've seen a lot of concerns about energy transition and ultimately demand destruction and a lot of uncertainty about how quickly that's going to happen. So big strategic tie-ups and deals “” those are entirely feasible.“

ExxonMobil, Chevron, BP and Shell recorded more than $50bn in losses between them last year, as