Chevron corp has officially agreed to buy Hess for $53 billion in stock in order to gain a bigger portion of the U.S. oil industry.
Chevron Chief Executive Michael Wirth in a statement shared “This is great for energy security: It brings together two great American companies.”
The oil/gas industry has seen several large scale acquisitions in2023.
Two weeks ago Exxon Mobil announced that it would buy Pioneer Natural Resources for around $60 billion.
Chevron To Acquire Hess For $53 Billion In Latest Mega Energy Deal https://t.co/fQ030d9HqX
— zerohedge (@zerohedge) October 23, 2023
Per Yahoo News:
Chevron Corp agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a large stake in rival Exxon Mobil Corp’s massive Guyana discoveries, the latest in a series of blockbuster U.S. oil combinations.
The top two U.S. oil producers in weeks have struck more than $110 billion in deals that will add years of oil output, much of it from U.S. shale. The deals will leave European rivals that had shifted their focus to renewable energy further behind in fossil fuels.
“This is great for energy security: It brings together two great American companies,” said Chevron Chief Executive Michael Wirth, who has bulked up its shale oil and gas holdings by acquiring U.S. rivals PDC Energy and Noble Energy.
The combination of Hess, PDC and Noble will bring Chevron’s total oil and gas output to about 3.7 million barrels per day (bpd). It will expand Chevron’s shale output by 40%, and put it neck and neck with Exxon’s projected 1.3 million bpd shale output following its Pioneer Natural Resources acquisition.
The deal gives Chevron a huge stake in Guyana, where it will become a 30% owner of an Exxon-operated field expected to produce more than 1.2 million bpd by 2027. Chevron operates in Guyana neighbors Venezuela and Suriname.
Chevron buys Hess for $53 billion amid surging oil prices | Just The News https://t.co/IQM6tI1K6A
— John Solomon (@jsolomonReports) October 23, 2023
Check out what AP reported:
Chevron is buying Hess Corp. for $53 billion and it’s not even the biggest acquisition in the energy sector this month as major producers seize the initiative while oil prices surge.
Crude prices rose sharply in early 2022 with Russia’s invasion of Ukraine and are hovering around $90 per barrel after ticking another 9% higher this year, meaning big drillers are flush with cash and looking for places to invest piles of cash.
The Chevron-Hess deal comes less than two weeks after Exxon Mobil said that it would acquire Pioneer Natural Resources for about $60 billion.
Upward pressure on oil prices are being applied from a number of fronts including the war in Ukraine. Oil markets are being stretched by cutbacks in oil production from Saudi Arabia and Russia, and now, a war between Israel and Hamas runs the risk of igniting a broader conflict in the Middle East. While attacks on Israel do not disrupt global oil supply, according to an analysis by the U.S Energy Information Administration, “they raise the potential for oil supply disruptions and higher oil prices.”
Chevron said Monday that the acquisition of Hess adds a major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota. Guyana is a South American country of 791,000 people that is poised to become the world’s fourth-largest offshore oil producer, placing it ahead of Qatar, the United States, Mexico and Norway. It has become a major producer in recent years with oil giants, including Exxon Mobil, China’s CNOOC, and also Hess, squared off in a heated competition for highly lucrative oil fields in northern South America.
Chevron must believe, Trump will win! Drill baby drill! https://t.co/aFsU6qfzR0
— Anna Maria Hill (@ah121254) October 23, 2023