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Every market rout has its reward and for a small coterie of bankers, it means spotting likely victims and plausible predators. As the flood of profits from expensive crude dwindles to a trickle, old bid strategies are being dusted off and the usual suspects are being touted in the hope that an oil price crash in 2014 might turn into a year of oil mega-mergers in 2015. However, the M&A guys may be disappointed because the world of oil has changed and the major companies look more like minefields than honeypots.

Back at the dawn of the oil industry, John D. Rockefeller liked to give his adversaries "a good sweating," cutting prices to ruinous levels in order to force competing refiners to sell out or close. More than a century on, Saudi Aramco seems to be taking a leaf from the Standard Oil book of rules, flooding the market with more product as the price drops. Speculation abounds over who is the Saudi victim? Is it the rigs fracking the Bakken shale in North Dakota? Or or is it more traditional rivals: Iran and Iraq, Russia, or the struggling West African exporters whose product is no longer wanted in America.

Like Standard Oil, Saudi Aramco has very deep pockets and it can sustain a long "sweating", even at oil prices well below $80 (U.S.) per barrel. Other, poorer national oil companies, such as Venezuela's PDVSA, will continue to pump crude at a loss, just to earn the dollars their countries need to import vital commodities, such as food and medicine. Much less clear is the future of the major oil companies of Europe and North America; their shareholders will be intolerant of weak profits or losses and the question is whether these companies will shrink to survive or take over weaker rivals.

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It was BP that started the last round of oil company takeovers in 1998 and it was no coincidence that its bid for Amoco was launched just as the Brent crude price dipped to $10 a barrel. The move was timed perfectly and Amoco was the perfect victim, inefficient and bloated with a high-cost management but with some desirable assets, such as a huge gas field in Trinidad. Exxon followed quickly with the takeover of Mobil and France's Total was shuffled into a political marriage with its louche cousin, Elf. The predators slashed and burned: head offices were sold, layers of management scythed and corporate jets grounded. The oil price then quickly recovered and earnings blossomed. You might wonder if history is about to repeat itself.

The world has become more complicated and more dangerous for ambitious, buccaneering CEOs. Among the oil majors, BP may be the most vulnerable and is frequently cited as a target for Shell. Even if the latter company lost its traditional caution, it would certainly be reluctant to take on BP's exposure to almost unlimited liability at the U.S. plaintiff's bar over the loss of the Deepwater Horizon rig. BG Group, a company that was a stock market darling for almost a decade for its dowry of choice assets in Brazil and widely touted as a desirable target, is now seen as exposed to very high-cost projects in Australia and Brazil.

Escalating costs have always been the oil industry's Achilles heel: the cash flow from the well has a tendency to build up in swelling staff numbers and corporate featherbedding. The opportunity to improve efficiency, reduce manpower and reduce overhead is a good part of the rationale for merger. However, a merger strategy based on cutting costs would be a high-risk gamble for an industry that is pushing the boundaries of technology in a physically dangerous environment with intense regulatory oversight.

With the hindsight of Deepwater Horizon, the Texas City refinery disaster in 2005 and the recent Lac Mégantic rail disaster, the task of merging two giant companies with distinct corporate cultures in a bid to shed many thousands of staff and billions of dollars in overheads might prove too risky to contemplate.

Meanwhile, the choicest assets – the largest and the lowest-cost oil and gas fields – remain off the books of the oil majors. In the view of the hydrocarbon giants, it is the national oil companies that still hold the aces in the pack. ExxonMobil's $40-billion venture into shale gas, XTO, is widely viewed as an ill-timed and overpriced venture, replicated by Shell, which was forced to write down heavily its shale investments. BP was once applauded for its Russian joint venture only to find itself embroiled in byzantine politics and a stranded shareholding in a national oil company beset by trade sanctions.

Even so, the "great sweating" could yet open doors. Russia is hugely vulnerable to these low oil prices and if continued without a lifting of the sanctions which prevent access to foreign capital, the country will be unable to invest sufficiently to maintain high levels of oil and gas output. The Western oil majors secured huge prizes following the Russian financial collapse in 1998 and it could happen again. It could also happen in Venezuela, in Iran and in other petro states where the ruling class fear the social upheaval from food and fuel shortages. Even without mega-mergers, the oil landscape could change fundamentally over the next few years.

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