2023's Energy Landscape: Record Deals and the Green Shift Ahead


Written by Finalis

Last edited on Feb 09, 2024

3 min read

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2023 marked a historic year in energy sector dealmaking, witnessing transactions worth an astonishing $192 billion. This figure represents a tripling of the deal value compared to 2022. The fourth quarter alone saw deals amounting to $144 billion, predominantly fueled by major acquisitions in the oil and gas industry. Notable among these were ExxonMobil's massive $65 billion acquisition of Pioneer Natural Resources and Chevron's $60 billion purchase of Hess.

In the US, oil and gas mergers and acquisitions (M&A) activity over the past two years has been largely concentrated in the Permian Basin. This region, known as the highest-producing oilfield in the country, stretches across West Texas and Southeastern New Mexico. However, the pace of deals in the Permian Basin is anticipated to slow down in 2024. This slowdown is expected due to the dwindling number of attractive targets remaining after the recent large acquisitions. In contrast, 2024 might witness a resurgence in smaller, asset-sized transactions across a broader range of locations. This shift could be driven by buyers looking to divest portions of their large-scale acquisitions, potentially leading to a surge in smaller-scale deals.

Embracing ESG and Net-Zero in the Renewable Energy Sector

Moving beyond oil and gas, the renewable and clean energy sector is gearing up for a significant year. The emphasis on Environmental, Social, and Governance (ESG) criteria is becoming increasingly vital for the long-term success of projects. As highlighted in Translinks' 2024 Trends Outlook, the global push towards net-zero targets and a transition from fossil fuels to sustainable energy sources has been a key driver of dealmaking activity in the renewables sector, elevating valuations within this space. The implementation of ESG factors is particularly pertinent for European projects, following the enactment of the Corporate Sustainability Reporting Directive in January 2023.

The Surge in Renewable Energy Opportunities

The Finalis Connect Marketplace is also riding the wave of ESG enthusiasm, showcasing a surge in green opportunities. Since the second half of 2023, the platform has listed 31 new renewable energy deals, representing over $5 billion in new deal volume. This surge underscores growing investor interest in sustainable energy projects and the broader shift in the energy sector towards greener initiatives.

As we reflect on the record-breaking dealmaking of 2023 and look towards the future, it's clear that the energy landscape is undergoing a transformative shift. The burgeoning interest in renewable energy, underscored by Finalis Connect Marketplace's surge in green opportunities, signals a pivotal change in investment priorities. This shift is not just a trend but a necessary evolution, driven by the global imperative for sustainable energy solutions and heightened ESG standards. While the oil and gas sector continues to play a significant role, the renewable energy market, buoyed by investor enthusiasm and regulatory support, points towards a greener, more sustainable future. As we step into 2024 and beyond, the energy sector stands at the cusp of this green revolution, poised to redefine the parameters of energy production and consumption in an increasingly ESG-conscious world.

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