An improvement in the global merger and acquisitions market (M&A) in the next 12 months is expected by 90% of oil and gas executives, according to industry experts.
EY said a “record-level” of dealmaking in the first quarter of 2018 has led to the boost in confidence.
According to a survey carried out by the firm, 62% of executives intend to pursue M&A in the next 12 months.
Meanwhile 90% expect competition to increase in the wake of further M&A activity.
Almost half said they are reviewing their portfolios every six months or more as businesses look to optimise their fitness for the future.
More than a third of executives expect to focus their influence of divestments over the next 12 months, with 56% looking to offload underperforming assets in that period.
Looking ahead, 90% view global economic growth as improving or stable.
However respondents cite inflation and market volatility as the biggest risk to investment plans, amid rising oil prices and oilfield services firms looking to renegotiate contracts at higher rates.
Political uncertainty and geopolitical tensions are also seen as problems for growth.
Andy Brogan, EY global oil and gas transactions leader, said: “The latest EY Global Capital Confidence Barometer reveals that major broad indicators, such as oil price stabilization and continued growth in demand – coupled with discipline shown by OPEC and non-OPEC members – has instilled confidence in oil and gas dealmaking over the past six months.
“But with government policy becoming harder to predict across the globe, companies are mindful that any increases in protectionism could have an impact on the efficient flow of goods and services across the sector.
“Movement of assets is creating a robust oil and gas M&A market, and the focus on portfolio transformation has spurred activity and renewed confidence across the sector. Indeed, the latest EY Global Capital Confidence Barometer finds that 73% of oil and gas executives expect to complete more deals in the next 12 months compared with 37% just six months ago. It isn’t surprising, therefore, that 74% expect their M&A pipeline to increase in the next year.”