Consolidation hasn’t stopped and, in fact, will play a big rolein the future for both large and small players in the oil and gasindustry, said David Moore, a strategic practices consultant forAndersen Consulting.

Moore, speaking at the plenary session of the Society ofPetroleum Engineers in Dallas this week, said that because as awhole, the energy industry has not done a good job of keeping upwith the marketplace in terms of shareholder value, it has beenunder “relentless” pressure to create new value. Pointing to the”mega mergers” of BP with Amoco and Arco, as well as Exxon’s withMobil, Moore said that while he believes the industry has seen the”last wave” of mega mergers, more will come for smaller companies,and different types of partnerships will emerge in the future.

“We’ll continue to see the consolidation of smaller majors andmore independents,” Moore predicted. “But we’ll also see moreportfolios restructured and more collaboration.” Using what he saidwould be “co” mergers, Moore said more oil and gas companies willbe combining to achieve shareholder value; consolidating theirtalents; co-locating to work on larger more complex projects;collaboration to streamline projects; cooperation to share talentand resources; and co-acting to build new things.

“We’re driving toward what I call network centric, whichinvolves more alliances and interaction. No longer will it be an ‘Iwin, you lose,’ scenario, but more of a ‘we win’ with more crossindustry environments.”

Because of the Internet, Moore said there will be more syntheticmergers, or mergers that don’t necessarily combine monetary assets,but rather, intellectual and resource assets. More specialists areexpected to emerge, as more companies outsource their services torely on others to do things they don’t do in house. And with thenew types of mergers, Moore said that the leading companies wouldpush to give more business to specialists.

“We’ll see more redefinition of the core business,” said Moore,and more companies will redefine their portfolios to manage at”e-speed.”

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