| 摘要 | 1. Research Purpose
Although the public interest in the causes and effects of oil-upstream M&A's as the number of contracts and the volume of the M&A dramatically have been increasing since 2004, there are little researches on the field. this study attempts to examine the trend, characteristics, and causes of M&A's in the upstream oil industry and performed theoretical and empirical analyses to find the reasons and incentives of oil-upstream M&A, suggesting several implications for related policies.
2. Main Analysis and Its Results
The number of M&A's in general industries has been exhibiting an upward trend in a 10-yearcycle since the mid-1980s for several reasons. For one, M&A was brisk during the period of economic recovery following the market meltdown due to war or energy crisis and economic depression. Likewise, such increase was in line with the rapid credit expansion and booming stock markets. In addition, external environmental changes such as industrial and technological impacts caused by technological and financial innovation, supply impact (oil price impact), deregulation, and intensified overseas competition preceded M&A in many cases. Finally, M&A transactions had been better facilitated when some changes occurred in the regulations (related to anti-monopoly or anti-M&A). The results of analyses on past data were almost consistent with the data on the upstream oil industry. Note, however, that the upstream oil industry shows several differences from general industries.
The most notable difference is that M&A transactions in all industries boomed in the mid-1980s following the recovery from the world economic depression alongside the rally in the stock market. Still, why was it that only the M&A in the oil industry went in the other direction? The reason for this was thought to be the sluggish international environment of the oil industry compared to that of other general industries. On December 9, 1985, Saudi Arabia vowed to regain its lost market share by ceasing to play its role as a shock absorber that balances OPEC��s allocated volume. This announcement had a negative impact on the crude oil market, with oil prices plummeting. This shock resulted in the serious shrinkage of the M&A market in the oil industry. In this study, several factors were classified by combining the various symptoms occurring in the course of restructuring the oil industry. This study then attempted to come up with the theoretical and empirical explanation for such. Those factors were: competition in acquiring technology to increase the collection ratio of oil rigs after the 1990s improving environment of the oil industry due to the oil price increase intensifying competition in securing the supply channel as demand for oil rapidly increased; deregulation of large state-owned oil companies, and overall turnaround of the macroeconomic environment.
Explaining the transitional changes of M&A in the upstream oil industry in connection with these factors and making a predictable model were the primary concerns of this study. Although not a standardized model, the proposed model was partly based on the neoclassical model. This study also tried to show that setting up a general, theoretical model for M&A in the upstream oil industry was not impossible by presenting an example of a structural mathematical model. The sample model was able to explain the transitional change in M&A in the oil industry, where external impact cannot be ignored. The biggest advantage of this model is that it can show that there are still driving factors based on the prediction on the profitability of new business opportunities despite the absence of fundamental changes in corporate productivity. In addition, the M&A of one company was shown to be able to stimulate other companies thus, M&A can flourish through the "three persons, four cases model" even without original productivity increase.
Variables such as market capitalization compared to the GDP of the USA, crude oil prices, number of cases of drilling oil rigs, exploration costs, development and drilling, and risk index of oil producing countries against the environment of the capital market, new opportunities, and degree of competition in the upstream oil industry were selected as variables. An empirical analysis on the effect of such variables on M&A was also conducted.
Most variables were confirmed to have the same direction, which was statistically meaningful in t and t-1 period. Moreover, the number of drillings --which could be a source of competitiveness depending on the crude oil price -- clearly showed the motive effect of M&A, i.e., whether or not statistical significance exists according to the time difference. In case of the crude oil price, the increase in oil price in t-1 period can be said to be the reason for the increasing number of M&A transactions. The rising crude oil price in t-1 period was absolutely needed to enhance the value of M&A in t period. That increasing competition inside the industry would serve to revitalize M&A as proven by the estimation value showing the increase in drilling in t-1 period and increase in M&A in t period was a statistically meaningful finding as well as one of the principal results of the analysis.
In this study, empirical review was conducted as to whether M&As in the upstream oil industry had an economic effect on the acquiring companies. Such review of the economic effect was expected to be an opportunity to expand the range of interpretation of the strategy for securing upstream resources for political and security purposes. Likewise, the ripple effect of M&A on the value of the acquiring company -- which could not be determined using existing M&A theoretical models (neoclassical model, entrepreneur��s interest pursuit model, and market timing model) was confirmed by cases in the upstream oil industry. Therefore, the results can be considered useful as case-to-case materials that are more advanced than the results of the empirical analysis on the ripple effect of M&A.
The result of the analysis using event study methodology did not support the common view in the stock market, i.e., "M&As generally cause an increase in the stock price." As a result of the analysis on the 17 selected companies�� 14 M&A cases, 7 M&A cases including Chevron were found to have a positive effect on the stock price 7 cases including ConocoPhilips did not wield any special effect, however. Furthermore, the M&A with Birchcliff Energy generated a negative effect. Such result of the analysis was contrary to the prediction of this study, i.e., most M&As enhance the value of the company and realize synergistic effects in terms of the profit ratio of stock. As an explanation, companies were illustrated to have reasons for jumping into the M&A war given the "Prisoner��s dilemma" where the increase in corporate value was not expected to become absolute using the proposed model. The result of the empirical analysis supported this explanation.
3. Policy Suggestions
Finally, this study attempted to present some policy suggestions based on the results. First, the upstream oil industry is not that different from general industries, at least in terms of the M&A market. Oil tends to be viewed as vaguely different from general goods due to its political and security characteristics. Of course, there are differences in terms of transactions involving "oil" as goods still, the behavior of companies producing and selling oil does not show significant differences from those in other industries. In other words, only the external and internal environments of oil companies are different the reaction mechanism is still the same. This suggests the need to view the upstream oil industry from the viewpoint of an economy veering away from the previously held extreme political and security viewpoint.
Second, there is a need for a more strategic approach as to when and how to advance into the oil industry. In general, the upstream oil industry only brings to mind the drilling and development of new oil rigs. Focusing on the symptom wherein efforts to increase oil deposit shift to M&A to secure the existing production oil field from new oil field development due to the increasing oil price and increasing costs of drilling and development is essential. This study suggests the need to examine carefully the changes in the global economic environment from a broad viewpoint as well as the oil price and demand and supply of oil vis-a-vis the timing of participation in M&A. The results revealed that companies were waiting when the business environment was rather poor while implementing self-restructuring they tended to make full-fledged expansion only after the international economic situation turned around. In particular, the turnaround of the financial market affects the increase in the number of M&As regardless of the kinds of industries. Based on the results, when M&As between major companies in the USA in early 2000 were pursued, a sudden change was predicted to occur in the oil market. As such, preparations for competition over securing resources on a large scale had to be made.
The result of this study is not expected to answer the following questions: whether acquiring a certain company is right at a specific time whether purchasing a certain oil-bearing reservoir is advisable, or whether purchasing an oil company with the same volume of oil deposit is good. Such kind of analysis requires a more technical approach if the target is selected. This study simply stressed the need for a more economic approach by taking one step further from the existing political and secure sense of value for the upstream oil industry from a broad viewpoint. Note that the upstream oil industry is not different from other industries at least in terms of M&A behavior. Identifying the trend in the upstream oil industry requires understanding not only the changes in the volume of oil deposit or oil price change but also the macroeconomic trends. As part of these efforts, the trend and behavior of M&A in the upstream oil industry were explained using a mathematical model equipped with a theoretical structure. The necessity of establishing this type of model was also emphasized. This model is expected to enhance the usefulness of objective empirical analysis and its interpretation.
These little efforts are expected to serve as "fertilizer" for the establishment of an overseas resources development policy in Korea in the future. Likewise, this study is expected to contribute to not only the development of a systematic model but also refinement of econometric methodology. |
