* 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 in the oil and gas sector in recent weeks has scope to accelerate as oil prices recover, advisory company EY said in a report.

While the number of deals in 2016 dropped year-on-year by 27 percent, their value rose to $395 billion from $340 billion in 2015.

Executives' appetite for acquisition clearly grew after OPEC and major non-OPEC oil producers agreed to cut output in November, boosting prices and instilling confidence that a recovery was under way. Exxon Mobil BP, Total and Statoil all signed major deals in the last few weeks of the year.

Royal Dutch Shell on Tuesday announced $4.7 billion in asset sales, including a large chunk of its North Sea portfolio in what many analysts saw as a bellwether for M&A activity due to its relatively high operating costs.

"Transactions took a back seat to the more urgent task to adapt to new economic realities in the sector last year. A number of deals were initiated but not completed amid ongoing volatility," Andy Brogan, EY Global Oil and Gas Transaction Leader said.

"We expect to see the momentum that began in the fourth quarter of 2016 continue in the year ahead."

Oil prices have gradually recovered since January 2016, when they sank to a 13-year low of $27 a barrel, forcing companies to slash spending and shelve deals on oil and gas fields.

Deal activity in North America rose to $76 billion in 2016 from $43 billion in 2015, driven primarily by the shale oil Permian basin, with its low operating costs and high reservoirs, which spurred a record number of transactions, according to the EY report.

A total of 1,024 upstream deals were struck last year with a combined value of $130 billion.

The infrastructure sector, which includes pipelines and storage 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 by oil price volatility, declined by 17 percent from a year earlier to 131 while rising in value by around 30 percent to $65.9 billion, EY said.

Major downstream assets included the $10.9 billion acquisition by a consortium led by Russia's oil champion Rosneft to acquire a 98 percent stake in an Indian refinery.[nL4N1CL05T

(Reporting by Ron Bousso; Editing by Ruth Pitchford)