Exxon Mobil of the U.S. announced July 21 that it had agreed to buy InterOil, a natural gas explorer based in Papua New Guinea, for up to $3.6 billion. InterOil owns rights to some of the world's richest gas fields.

Papua New Guinea has low labor costs and is close to major consumers of liquefied natural gas, including Japan, South Korea and China. Exxon Mobil decided to make its biggest acquisition since 2012 in hopes that crude rises from the current level of $50 a barrel by 2020, when InterOil is expected to begin LNG production.

The industry began moving toward consolidation in 2014 amid a downturn in crude prices. Royal Dutch Shell decided in April 2015 to purchase U.K.-based BG Group. Industry watchers expected other energy majors to follow suit, but they held back as crude continued to decline.

The InterOil deal signals changing tides as industry titans battle over smaller players while cheap crude keeps equipment and labor costs low. Papua New Guinea-based Oil Search, backed by French giant Total, had reached an agreement to buy the company in May but was eventually outbid by Exxon Mobil.

BP has plans for expanding the Tangguh LNG project in Indonesia, in which such Japanese companies as Inpex and Mitsubishi Corp. also have interests. An estimated $8 billion will be invested to boost annual output by 50% to 3.8 million tons.

Tangguh is the most competitive LNG project for delivering gas to such markets as Japan, CEO Bob Dudley said last Tuesday.

Asia accounts for three-quarters of global LNG demand, and consumption in such countries as China and India is only expected to grow. In contrast to crude oil development, where governments usually take the lead, most LNG projects are headed by corporations.

Chevron and partners including Exxon Mobil have agreed to invest a total of $36.8 billion in a Kazakhstan oil project to expand crude oil production there to a daily 260,000 barrels. The crude can be transported directly from the field to China via pipeline.

An immediate jump in crude prices remains unlikely, and overall investment by oil majors continues to fall. Exxon Mobil is behind on its planned capital expenditures of more than $23 billion for the year, according to Vice President Jeff Woodbury. Shell is also cutting down on investments.