ExxonMobil Acquires Chevron in $25 billion Merger
Major players in the oil industry continue to make significant mergers and acquisitions.
Big Oil keeps doing big deals.
ConocoPhillips said Wednesday it had agreed to buy Marathon Oil in an all-stock deal worth $22.5 billion, including about $5.4 billion of debt.
Marathon Oil shareholders will be getting 0.255 ConocoPhillips shares for every Marathon share they have, which is 14.7% higher than the closing price on Tuesday.
The merger between the two Houston-based competitors comes after ExxonMobil's $60 billion acquisition of Pioneer and Chevron's $53 billion deal to take over Hess. Other big consolidations in the industry include Occidental purchasing CrownRock and Diamondback Energy buying Endeavor Energy Partners in cash and stock deals worth billions of dollars.
Oil giants are benefiting from high oil prices, leading to increased profits. They are using this extra money to purchase assets in the Permian basin, which has played a key role in making the US the top producer of oil and gas. Despite calls for more investment in renewable energy, they are focused on maximizing returns for shareholders.
ConocoPhillips CEO, Ryan Lance, expressed excitement about acquiring Marathon Oil, stating that it enhances their portfolio and aligns with their financial goals. The purchase will add valuable, cost-effective resources to their inventory.
The Financial Times reported earlier Wednesday that a deal was close and that Conoco and Devon Energy had been vying for weeks to acquire Marathon.
This is a developing story and will be updated.
Editor's P/S:
The recent spate of mergers and acquisitions in the oil industry is a clear indication of the industry's focus on maximizing shareholder returns. Despite calls for increased investment in renewable energy, oil giants are prioritizing the acquisition of assets in the Permian basin, which has played a key role in making the US the top producer of oil and gas. This consolidation within the industry is likely to lead to increased market dominance for the largest players and potentially higher prices for consumers.
It is important to note that the focus on short-term profits by oil companies is at odds with the urgent need to transition to a clean energy economy. The Intergovernmental Panel on Climate Change (IPCC) has warned that we have only a few years left to take decisive action to limit global warming to 1.5 degrees Celsius above pre-industrial levels. This will require a rapid and significant shift away from fossil fuels towards renewable energy sources. The continued investment in fossil fuel extraction and infrastructure by oil companies is therefore deeply concerning and runs counter to the goals of the Paris Agreement.
