The acquisition will give Chevron a significant foothold in Guyana,the South American country that is one of the world’s newest oil producers. It will enable faster production growth and more generous returns to investors,according to the statement.
“The prize here is Guyana,” said Peter McNally,an analyst at Third Bridge Group. “And it’s only gotten bigger” since oil was first discovered in the country less than a decade ago,he said.
The deal comes as a new wave of consolidation is reshaping the energy landscape. Exxon Mobil announced earlier this month it agreed to buy shale-oil producer Pioneer Natural Resources for $US59.5 billion ($93.8 billion),locking up new drilling sites for years to come and underpinning a bet that oil and gas will remain central to the world’s energy mix for decades ahead.
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“It’s an eat or be eaten world,” said Cole Smead,who helps manage $US5.3 billion including US energy stocks at Smead Capital Management. “People who can drive higher returns will be the ultimate owners.”
Chevron shares fell 2.3 per cent when regular trading opened in New York. Hess was up 0.7 per cent.
The acquisition will solidify the position of the US majors at the very top of the international oil and gas industry. While their European peers have won back some favour from investors by shifting their emphasis from low-carbon energy back to fossil fuels since Russia’s invasion of Ukraine,the valuations of Exxon and Chevron remain far higher.