UK-linked oil and gas M&A deals reach $19.6bn — Asharq Al-Awsat
The value of mergers and acquisitions in the oil and gas sector in which a UK participant was either the buyer or the acquisition target has reached $19.6 billion since the start of 2026. This exceeds the $16.5 billion recorded for all of 2025 and marks the highest level of activity since at least 2022, Asharq Al-Awsat reports, citing LSEG data.
Analysts and bankers expect further consolidation in the UK North Sea sector. They cite high oil and gas prices, the need to cut costs at mature fields, and tax incentives for company mergers among the factors.
Taxes and costs
The UK tax rate on oil and gas production stands at 78% following the introduction and increase of the Energy Profits Levy. Greig Aitken, director of corporate research at Wood Mackenzie, said that many tax-driven deals had already taken place in the sector in recent years.
Tony White, a representative of consulting firm MKI, said that combining two operators in the UK North Sea sector could allow the larger company to benefit from tax credits and operational synergies. Cavendish believes that smaller operators are facing growing pressure to merge, raise capital, or accept takeover offers.
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Sale of BP assets
In July, BP announced its intention to sell its North Sea oil and gas fields as part of a portfolio review aimed at improving profitability. Analysts estimated the potential sale value at around $2 billion. According to a person familiar with the process, the next round of bidding is due to take place in December.
Among the potential buyers of BP's assets, Cavendish analyst James McCormack named UK companies EnQuest, NEO NEXT+ and Ithaca. EnQuest Chief Executive Amjad Bseisu had previously stated his interest in these assets.
New market deals
In September, Genel Energy raised its offer to acquire Capricorn Energy to $436 million, outbidding Norway's DNO. Israel's Ratio Petroleum offered $196 million for Pharos Energy in August, exceeding Serica Energy's offer. Gulf Keystone Petroleum and ShaMaran Petroleum also announced a $601 million all-share merger, while Ithaca agreed to acquire three offshore oil assets from Canada's Suncor for C$1.2 billion.
