Ready for change: Q4'24 M&A trends in energy, natural resources and chemicals

The energy, natural resources, and chemicals (ENRC) sector is on the brink of significant change under the new Trump administration. The oil and gas sector is expected to benefit from expedited federal drilling permits, expanded exploration, and reversed suspensions on liquefied natural gas (LNG) export permits. However, the US shale industry and Saudi Arabia are pushing for financial stability and limited production. The renewable energy sector may face challenges due to the administration's skepticism and temporary suspension on federally owned lands and waters. Energy independence policies will shape the sector, and potential inflation reduction act (IRA) repeals could impact it further. Furthermore, the chemicals sector is likely to benefit from revised Environmental Protection Agency (EPA) risk assessments and stabilized oil prices.

In 2024, the sector showed mixed performance amid election uncertainty. This year, the sector is poised for considerable changes driven by the new administration's policies and ongoing market trends.

Here are some key trends and insights from 2024:

• In Q4, the ENRC sector experienced a 19 percent decrease in deal volume and a 31 percent drop in deal value quarter-over-quarter
• For the entire year, the number of deals increased by only 3 percent year-over-year, while deal value declined by 23 percent 
• The oil and gas sector led in both deal volume 43 percent and value 73 percent
• Chemical companies divested non-core segments and streamlined operations, while demand for specialty chemicals and polymers increased
• The power and utilities sector is poised for positive developments under the Trump administration due to rising demand for electricity 

For more ENRC deal trends and insights, download our report, Ready for change: M&A trends in energy, natural resources and chemicals.