Cross-border mergers and acquisitions by oil and gas multinational enterprises: Geography-based view of energy strategy

Given that global crude oil prices are significantly dropped and business consolidation transactions are markedly increased in recent years, this paper, to date, is the first to examine the cross-border merger and acquisition strategy of oil and gas multinational enterprises. Using a fine-tuned sample of 150 large-scale oil acquisition transactions (US$535 billion) announced by oil and gas enterprises from over 50 countries during the period 2005–2015, we endeavor to answer four fundamental research questions: who is where, what for; who is there, why; who is where and there; and who is a serial acquirer. To do so, we propose an integrated framework of geography-based view of energy strategy by leveraging theoretical insights from the energy, economic geography, international business strategy, and corporate finance literature. On top of that, we discuss the dynamics of the oil and gas industry, and show the remarkable trends in the crude oil prices over the past three decades, 1990–2016. Our geographic analyses highlight that state-owned oil companies from Asia and a less extent Europe have rapidly expanded into resource rich countries such as Canada and the US to secure oil reserves as well as acquire industry-specific strategic assets. This research contributes to the geography-based view of energy strategy, and discusses policy and managerial implications to sustain the world oil and gas industry.