Statoil chief says more oil deals likely after Shell-BG merger

JAVIER BLAS

WASHINGTON, D.C. (Bloomberg) -- The CEO of Norway’s largest oil producer said the industry will probably see more deals after Royal Dutch Shell’s $70 billion to BG, especially if crude prices remain depressed.

“All player are looking now at opportunities,” Eldar Saetre, said in Washington on Friday. “There could be more deals. It depends on the oil price, if prices stay low players will get distressed and look for deals.”

Saetre said that the high valuation expectations of potential sellers was “still a problem.” He declined to comment on Statoil’s deals strategy.

Shell’s move for BG, the industry’s biggest deal in at least a decade, has spurred speculation that oil and gas is set for a round of consolidation as producers look to cut costs and restore profitability. In the late 1990s, several of the world’s largest oil companies combined, starting with BP Plc’s purchase of Amoco Corp.

Largest companies may try to pick up smaller competitors less able to withstand a period of low prices. In Europe, possible targets include Tullow Oil and Ophir Energy. In the U.S., Anadarko Petroleum, Hess, Whiting Petroleum, Marathon Oil and EOG Resources are all seen as potential candidates.