In 2006, mergers and acquisitions (M&A) in the energy industry totaled $566 billion, up from $372 billion in 2005. Already, the value of deals announced this year has reached $356 billion. While the recent pace of transactions is reminiscent of the merger boom of the 1990s, current M&A activity is not dominated by the companies that emerged from the previous boom, such as ExxonMobil. Rather, the field is shaped by the rise of national oil companies (NOCs), a highly liquid global market and a group of hedge funds and activist investors motivating and facilitating takeovers. This is an environment in which western companies not only face competition when making acquisitions, but may even be the target of acquisitions themselves. NOCs spent $57 billion on acquisitions in 2006. Though most of these transactions have been domestic, such as Gazprom’s acquisition of a controlling share in Royal Dutch Shell’s Sakhalin 2 project, international deals by NOCs, such as CNOOC’s (China) $2.7 billion–purchase of a 45% share in South Atlantic Petroleum’s Akpo field in Nigeria, are becoming more frequent. Source: Financial Times