According to IHS senior principal researcher Oliver Stephenson, the Australian oil and gas industry has suffered from a “wider economic malaise”

Speaking at the Good Oil Conference in Fremantle yesterday, he said LNG M&A in the half year to June 2013 had suffered on the back of high activity in calendar year 2012.

On a graph showing LNG transactions in the past five years, 2013 was virtually invisible.

He said investors were nervous in Australia and in the US particularly because of the fiscal cliff.

Mirroring wider industry sentiment, Stephenson said the biggest driver of activity was Africa.

“You can see in the past 18 months, there has been a big switch in the market towards Africa,” he told delegates at the conference.

“That’s almost entirely east Africa.”

He said Russia had also driven M&A activity in 2013 and PNG was shaping up as a significant market.

Stephenson said buyers were mainly financial companies and private equity firms in the Asia Pacific.

“Big story in the past five years has been the rise of the Asian national oil companies.”

He said US companies were net sellers of their international assets as they tried to refocus on domestic assets.

“They only have certain of investment capital … and the idea is that they decided the rate of return would be higher on their domestic project,” Stephenson said, adding that the move had significantly impacted Asia.

Stephenson said he did not expect a large amount of activity in the shale industry but the UK and Argentina would drive what little activity there was – but at the moment it was a buyer’s market.