Global oil execs at odds over probability of 'comprehensive' US energy policy

By OGJ editors

HOUSTON, June 23 -- Oil and natural gas company executives remain divided over the probability of a comprehensive US domestic energy policy being ratified, based on the results of a recent survey conducted by KPMG LLP.

The survey, which polled 108 executives at KPMG's recent Global Energy conference in Houston, found that 42% of the respondents thought that a comprehensive energy policy is unlikely to happen, while the same percentage thought that a policy will be reached in the next 5 years, KPMG reported.

About 16% of the respondents, meanwhile, thought that a policy will be enacted in the next 6-10 years.

M&A action, financial focus
The survey also found that most energy executives view merger and acquisition (M&A) activity in North America increasing over the next 3 years, KPMG reported.

"On the merger-and-acquisition front, activity in North America over the next 3 years was universally seen as increasing," KPMG reported. About 65% of the executives polled thought that most of the consolidation would occur among small independents. Another 52% expected M&A activity to occur between larger independents.

"The results indicate that oil and gas producers will be refocusing their attention on the North American market and strengthening their balance sheets through acquisitions," said William Kimble, industry sector leader for KPMG's energy and chemicals practice. "This industry has had to address and adjust to many changes over the past year and a half and is still very cautious. However, we are seeing signs that it is ready to take advantage of new opportunities," he said.

KPMG's survey also indicated that, over the next 2 years, oil executives plan to focus on getting "their companies' financial house in order." About 23% of those asked were particularly interested in cost control and profitability, while 21% said they were also looking to strengthen their balance sheet, KPMG reported.