What drives asset transactions on the Norwegian continental shelf

Abstract

What drives asset transactions on the Norwegian Continental Shelf? This study evaluates the influence of commodity prices, as well as energy reserves, on the number of asset transactions per year on the Norwegian Continental Shelf (NCS). The empirical data collected from the NCS from 2000 to 2014 seems to suggest that merger and acquisition transactions are influenced by oil reserves; the data also shows that gas reserves are an upside for the acquirer involved in merger and acquisition transactions. Surprisingly, changes in oil prices and acquisitions show causality in both directions. However, although causality is found, the correlation between the change in oil price and mergers and acquisitions transactions is weak and with low significance; the reasons for this behavior will be discussed in detail. Furthermore, by use of a triangulation method, a description and classification of the possible strategic drivers related to the asset transactions on the Norwegian Continental Shelf during the last 14 years is also presented. This study is based mainly on the publicly available data from the Norwegian Petroleum Directorate.