Energy sector observers expect that the $70 billion proposed deal between Royal Dutch Shell and BG Group should be just the first in a wave of oil industry consolidation.
But whether it could match the energy mergers of the late 1990s is an entirely different matter.
Shell and U.K.-based BG agreed this week to what would be the third-largest oil and gas transaction on record. Shell officials said they explored a number of opportunities in the wake of sliding oil prices and that acquiring BG would increase its oil and gas reserves by 25 percent, while adding the British company's expertise in the liquefied natural gas field.
"We have two very strong portfolios combining globally in deep water and integrated gas," Shell CEO Ben van Beurden said.
Analysts said falling crude prices increased the likelihood that established energy companies would look to acquire proven reserves rather than explore for additional resources.
Some also noted the similarities between the current oil market and the crude supply glut in the 1990s, when new production sparked huge acquisitions by BP, Chevron and Exxon.
“This could mark the beginning of a M&A rave, much like the one we saw in the late 1990s,” Accendo Markets analyst Augustin Eden said.
Dennis Cassidy of AlixPartners added that the current environment took shape in "months if not weeks" instead of in a typical years-long cycle.
Others, however, suggested Shell's rivals might be content with their current size and decide against further acquisitions. Cassidy added that the Shell-BG deal reflects those companies' beliefs that oil prices are at their low point.
"Most of the big players are weighing up opportunistic acquisitions, but few have the means or appetite for deals anywhere near this scale ... don't expect a wave of late '90s-style consolidation," consulting firm Wood Mackenzie said.