* Deal volume down 27 pct in 2016 from year earlier: EY
* But deal value rose to $395 billion
* Recent pick up set to accelerate, EY's Brogan says
* GRAPHIC: 2016 Oil and Gas M&A (http://tmsnrt.rs/2jRdAHn)
By Ron Bousso
LONDON, Feb 1 (Reuters) - A sharp pick up in deal-making inthe oil and gas sector in recent weeks has scope to accelerateas oil prices recover, advisory company EY said in a report.
While the number of deals in 2016 dropped year-on-year by 27percent, their value rose to $395 billion from $340 billion in2015.
Executives' appetite for acquisition clearly grew after OPECand major non-OPEC oil producers agreed to cut output inNovember, boosting prices and instilling confidence that arecovery was under way. Exxon Mobil BP, Total and Statoil all signed major deals in thelast few weeks of the year.
Royal Dutch Shell on Tuesday announced $4.7 billion in assetsales, including a large chunk of its North Sea portfolio inwhat many analysts saw as a bellwether for M&A activity due toits relatively high operating costs.
"Transactions took a back seat to the more urgent task toadapt to new economic realities in the sector last year. Anumber of deals were initiated but not completed amid ongoingvolatility," Andy Brogan, EY Global Oil and Gas TransactionLeader said.
"We expect to see the momentum that began in the fourthquarter of 2016 continue in the year ahead."
Oil prices have gradually recovered since January 2016, whenthey sank to a 13-year low of $27 a barrel, forcing companies toslash spending and shelve deals on oil and gas fields.
Deal activity in North America rose to $76 billion in 2016from $43 billion in 2015, driven primarily by the shale oilPermian basin, with its low operating costs and high reservoirs,which spurred a record number of transactions, according to theEY report.
A total of 1,024 upstream deals were struck last year with acombined value of $130 billion.
The infrastructure sector, which includes pipelines andstorage terminals, produced the largest increase in volume,rising by 37 percent to 93 deals worth $146 billion.
Deals in the refining sector, which is less influenced byoil price volatility, declined by 17 percent from a year earlierto 131 while rising in value by around 30 percent to $65.9billion, EY said.
Major downstream assets included the $10.9 billionacquisition by a consortium led by Russia's oil champion Rosneft to acquire a 98 percent stake in an Indianrefinery.[nL4N1CL05T
(Reporting by Ron Bousso; Editing by Ruth Pitchford)
