Trends In Property Acquisitions And Mergers In The Oil Industry Since 1954

In the past few years the world petroleum industry has increasingly felt the weight of changes in the principal economic factors affecting pro¬fits. As a result of, these changes, it has been necessary for many oil companies to acquire certain new facilities in order to strengthen their competitive positions and thereby protect their tremendous investments in crude oil reserves, pipe line facilities, refining operations, and marketing outlets. Principally these needs have been met by new capital outlays. A supplementary, method of acquiring needed facilities, however, has been to obtain existing facilities through complete or partial acquisition of other companies.' properties. It is this method of meeting competitive pressures with which this paper is concerned. This paper presents a statistical breakdown of the mergers and acquisitions which occurred in the oil industry between January 1, 1954, and October 1, 1959, showing the frequency' with which certain types of properties were acquired in each of the years studied. In addition, it discusses the principal economic conditions which stimulated many of these property trans¬fers, comments on the effects of these mergers on the consuming public, and indicates the types of, mergers and the rate at which they may be expected during the next three or four years. The basic data upon which the statistical analysis presented in this paper is based were taken from several published sources. Obviously they are somewhat incomplete because not all mergers and acquisitions were reported However;, a careful search was conducted through, The Wall Street, Journal, The Oil and Gas Journal, Potroleum Week, and The Oil Daily with the result that the data should be reasonably complete and comparable for each of the years studied, It is believed, therefore, that the statistical analysis which' follows provides a reasonably accurate indication of the general trend in mergers and acquisitions during the period studied.