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Chevron to Acquire Hess for $53 Billion in Latest Major Oil Deal [1]

['Clifford Krauss', 'Stanley Reed', 'More About Clifford Krauss', 'More About Stanley Reed']

Date: 2023-10-23

In the second energy megadeal this month, Chevron, the second largest U.S. oil giant, said Monday that it had agreed to acquire Hess, a medium-sized rival, in an all-stock deal valued at $53 billion.

The deal marks a further consolidation of the energy industry, especially in the United States, where smaller companies appear to be taking advantage of relatively high oil prices to join forces with bigger players. The transaction follows Exxon Mobil’s $60 billion purchase of shale driller Pioneer Natural Resources this month, another sign of confidence among large industry players in the future of fossil fuels even as policymakers promote cleaner energy sources.

Like Exxon’s acquisition of Pioneer, Chevron’s move shows that big oil companies want to invest closer to home amid rising political risks in Asia, the Middle East and Africa. In recent years, Chevron has increased its holdings in the Rocky Mountains and the Permian basin straddling Texas and New Mexico.

“Besides the United States, South America is the region where Chevron is making its bet,” said Peter McNally, an energy analyst at Third Bridge, a research firm. He said the recent flurry of acquisitions remind him of a wave of takeovers a quarter-century ago that produced Exxon Mobil and Chevron-Texaco. At that time, he said, the companies were looking to lower costs; today, the acquired companies offer large assets and specialized expertise to develop unconventional resources like shale.

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[1] Url: https://www.nytimes.com/2023/10/23/business/chevron-hess-acquisition.html

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