In through the out-door

The US upstream is proving a hive of M&A activity. The retreat of the majors is providing tasty offerings for independents. And, in this high-oil-price environment, the outlook for further asset transfers looks bright. James Gavin reports

THE MAJORS' long-running exodus from North America's upstream sector has shifted up a gear this year, with transfers of assets to cash-rich independents accelerating in the second quarter. While the US and Canadian upstream sectors have moved off the major oil companies' radar screens, as more enticing opportunities present themselves in long-term growth areas overseas, domestic exploration and production (E&P) firms have proved more than willing to step into the breach. According to John S Herold, the energy research firm, mergers and acquisitions (M&A) activity by mid-June in the US and Canada had reached $17.8bn—equivalent to the entire value of North American deals in 2003. Deals