ExxonMobil, Chevron, Occidental Petroleum, and ConocoPhillips have snapped up rivals at a staggering clip, and their combined grip on the Permian Basin now accounts for 58% of production. That level of market concentration signals more upheaval ahead for Texas energy.
A Reuters analysis pegged the four majors’ control following a string of 2023 megadeals. Exxon, Chevron, and Oxy each closed multibillion-dollar acquisitions last year. ConocoPhillips engineered two major takeovers across 2022 and 2023. The rapid consolidation wave pressures smaller operators to find partners or risk being squeezed out.
That momentum pushed mergers and acquisitions to the top of EY’s annual forecast of oil and gas trends.
EY, the consultancy formerly branded Ernst & Young, identifies four forces shaping the industry this year.
**Deal-making accelerates**
Rising interest rates and inflation chilled M&A across most sectors in 2023. Oil and gas bucked that trend. Strong cash flows, revived investor confidence, and a growing acknowledgment that hydrocarbons will remain central to the global energy mix have fueled a surge in announced transactions. EY expects continued consolidation plus strategic bets on low-carbon ventures including carbon capture, hydrogen, and renewable natural gas. Creative deal structures, partnerships, and new commercial ecosystems will define the next phase.
**Climate disclosure forces new thinking**
Strict emissions reporting mandates are taking effect in the European Union and California, with potential federal rules looming. Companies now scramble to build reliable monitoring and reporting systems. Yet EY sees a bigger shift underway. The winners will treat compliance as a starting point, not an endpoint, pivoting toward product differentiation and lower-carbon offerings that create fresh revenue streams.
**Federal incentives demand commercialization**
The Inflation Reduction Act and Infrastructure Investment and Jobs Act unlocked billions for hydrogen, carbon capture, and other emerging technologies. Oil and gas companies bring deep pockets, engineering expertise, and long-term vision to these projects. But government money only covers development. Participants must generate their own demand. The companies that thrive will invent commercial models for markets that barely exist today.
**Technology drives operational edge**
Enterprises that deploy disruptive tools at speed and scale while retraining their workforce will outpace rivals. EY emphasizes operational efficiency as the mechanism for absorbing acquisitions, integrating artificial intelligence, and using real-time data to make sharper strategic calls.
The consolidation spree shows no signs of slowing. Companies that master both the deal market and the technology curve will likely dominate whatever energy landscape emerges next.
