Brazil’s oil & gas M&As dry up in 1Q25
M&A’s in Brazil’s oil and gas sector declined in the first quarter of 2025, according to KPMG.
There was only one transaction during the period, compared with four in the first three months of the previous year. The deal was the sale by Prumo Logística of 70% of Vast Infraestrutura to China Merchants Port, media reported in February.
“It’s important to put this into context. This movement doesn’t necessarily indicate a structural negative trend, but rather a temporary adjustment in a scenario marked by volatility,” Bruno Marcondes, a partner at KPMG, told BNamericas.
One factor behind the slowdown is pressure on oil prices, influenced by rising global supply, particularly due to recent production increases by OPEC, which has led to more conservative asset valuations.
Another factor cited by the consultant is the uncertain domestic regulatory environment, especially regarding environmental and tax matters, which raises perceived risk for investors.
Marcondes also pointed to the high cost of capital, driven by still-elevated interest rates, and significant geopolitical risks as other sources of caution in capital allocation within the energy sector.
“Brazil remains a strategic market, with attractive assets and great growth potential, but we have internal issues that need to be addressed, such as regulatory predictability and legal certainty, to ensure a more favorable environment for attracting investment,” the consultant said.
He added that there is also room for consolidation in the sector, particularly in the supply chain.
“Success will depend on our ability to respond with agility, institutional clarity and a focus on operational efficiency,” Marcondes said.
In 2024, KPMG tracked a 62% increase in M&A activity in the oil and gas sector compared to the previous year, driven by transactions involving small and medium-sized companies.
