We are set for a grim winter on the energy front - utilities are scrambling to buy gas at ever higher prices and the price of oil, which seemed to be cooling, is heating up again, agitated by war in the Caucasus, oil nationalism, China and Opec.

It is not only consumers who are at risk. This world of high prices, high walls and high tension is bad for big oil companies. Their share prices have been in freefall for three months; since the end of May the world’s top three, ExxonMobil, Royal Dutch Shell and BP, have lost about a fifth of their market value. Oil company shares are volatile, buffeted by the value of the underlying commodity, but the sell-off in the majors began even before the July peak in the crude price. The worry is that these companies are beginning to see the end of the road. The fear is not that the world as a whole is running out of oil. It is that the oil majors are at the end of a production growth cycle that began in the 1960s when they were rescued by the discovery of Prudhoe Bay in Alaska and Brent in the North Sea.

Back then, the prospects for a group of Western oil companies, dubbed the Seven Sisters, were similarly threatened by nationalism, the closing of doors in the Middle East. Exploration success was their saviour. But, aside from a big find in Brazil, there are no signs that wildcat drilling will save these companies from becoming dull utilities. To add insult to injury, the main beneficiary of Tupi, the Brazilian find, is not a Western oil major but a state oil company, Petrobras.

The message to Exxon, Chevron, BP and Shell is clear: we can do this ourselves.

When companies cannot grow through their own efforts, they write cheques and issue shares. The last big oil merger cycle was a decade ago and we are set fair for another bout. The majors have held back - a year ago BP toyed with the idea of courting Shell and Shell has an on-off love affair with BG Group.

BP is the weakest link. Its shares trade on only six times next year’s earnings and its management is buffeted by strife in Russia and now Georgia. There can be little doubt that rivals are watching and considering what might be done.

The most likely predator is ExxonMobil, whose stock is so highly rated that its market value now exceeds that of BP and Shell combined.

Of course, any deal would require divestments to satisfy the Department of Justice. But BP’s troubled American fuel factories are not its crown jewels and would find a better home elsewhere.

The prize is upstream, where Exxon needs more. It is too reliant on a big gasfield in Qatar. BP would be a mouthful, but Exxon is getting hungry.

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