HOUSTON, Dec 5 (Reuters) - The oilfield service sector

is poised for more consolidation in 2025, according to

Deloitte's 2025 Oil and Gas Industry Outlook, with

President-elect Donald Trump expected loosen regulations on the

U.S. oil and gas industry.

The uptick in deals in the services sector would follow

a wave of mega-mergers among oil producers, including Exxon

Mobil ( XOM ) and Pioneer Natural Resources and ConocoPhillips ( COP )

and Marathon Oil.

Small-sized oilfield companies could seek favorable buyouts

as their customer base consolidates and shrinks, according to

Deloitte, the world's largest consulting firm, following rampant

M&A activity across upstream customers.

WHY IT MATTERS

Deals across the U.S. shale patch have shrunk oilfield

firms' customer bases, notably in the prolific Permian basin

straddling Texas and New Mexico. That field is set to produce

6.51 million bpd of crude in 2025, according to the EIA, up from

6.29 in 2024. It accounts for just under half of total U.S.

output.

BY THE NUMBERS

Deals in the oilfield services sector in the first nine

months of 2024 reached $19.7 billion, the highest since 2018,

according to Deloitte.

Buyer interest for drilling rigs increased in 2024 with deal

value reaching $3.8 billion, its second-highest level since

2018.

KEY QUOTES

"We think the new administration could be positive for M&A,

and that we will see a little more loosening around that because

it was getting more difficult to get M&A done the last few

years," Deloitte's global sector leader for oil, gas and

chemicals practice John England said in an interview.

U.S. lawmakers have sought increased scrutiny by the Federal

Trade Commission (FTC) over multi-billion dollar deals.

Gas producers Chesapeake Energy and Southwestern

Energy delayed their $7.4 billion merger after the FTC

requested further information in April. The companies closed the

deal in October. Exxon Mobil ( XOM ) and Pioneer Natural Resources

received similar requests from the FTC related to their $60

billion merger, which closed in May.

"A fairly fragmented (oilfield service) market and some

loosening from the administration sets a nice stage for

potential consolidation," England said.

(Reporting by Georgina McCartney in Houston;)