Mergers and acquisitions (M&A) within the oilfield services sector should pick up steam over the next one to two years, with most of the activity centered in North America, according to a survey by Ernst & Young.

In a report issued on Wednesday, “Dealmaking in Oilfield Services,” the consultant said energy industry and private equity executives who deal in the sector were surveyed, with most of those responding (84%) expecting to see more M&A in 12-24 months. None of 50 who were surveyed expected dealmaking to decline.

According to 80% of those asked, North America is likely to lead all regions in activity, followed by Asia-Pacific (52%), Western Europe (26%), Eastern Europe (14%) and Africa (12%).

“The energy sector faces multiple pressures requiring companies to remain nimble and proactive in anticipating and adapting to the changing environment,” said Ernst & Young’s Andy Brogan, global transactions advisory services leader for oil and gas. “The ability to integrate will be vital to success in the emerging markets while balancing the ability to deliver cost synergies in the developing markets. Through M&A and joint ventures, oilfield services companies can minimize risk and maximize earning potential.”

According to the consultant, “multiple drivers” explain the increasing appetite for M&A.

“Most respondents (88%) cited access to new markets and customers as the primary driver of acquisitions, while vertical integration to extend services and access to new technology followed closely. Oilfield services companies will also look for opportunities to broaden and expand their service offerings.”

More than half of those responding (54%) cited changes in regulatory framework as the “biggest challenge” to executing their business strategy, while the second big challenge, cited by half of those responding, was identified as economic and commodity price uncertainty.

Around one-fifth of the respondents said political upheaval in major oil and gas provinces was the “biggest macroeconomic threat,” while another 20% “singled out the possibility of resource nationalism” as the top challenge.

“The uncertain business environment has created considerable risk within the oilfield services sector, causing possible obstacles to companies’ financing,” said the report. However, despite “short-term difficulties,” more than half of those surveyed said oilfield service companies would have more access to equity in the next two years.