Inside Chevron and Exxon’s Billion-Dollar Bets

By: Anneken Tappe · October 26, 2023 · Reading Time: 2 minutes

Merger Momentum

The past week has been big for mergers and acquisitions in the oil industry.

On Monday, Chevron (CVX) revealed its intent to purchase Hess (HES) for $53 billion. But that was only the second largest deal of the week, it turned out. The first belongs to Chevron’s competitor ExxonMobil (XOM), which announced its plan to acquire Pioneer Natural Resources (PXD) for $59.5 billion just days before.

These two major moves hint at the world’s continued reliance on hydrocarbons, even as clean energy captures headlines.

Hydrocarbon’s Hold

Much of the world wants cleaner energy, backed by rising investments and advancements in sustainable technologies. But the International Energy Agency still believes demand for fossil fuels has yet to peak. A major driver of the ongoing demand is development in Africa, Asia, and Latin America. As populations and GDPs grow, so does energy demand.

Fossil fuels remain relatively cost-effective and easily transportable sources of energy, compared to the costs and complexities of clean energy infrastructure.

Obstacles & Opportunities

Chevron and Exxon’s eye-popping expansion strategies come at a time when their European counterparts brace for stricter emission controls.

Plus, geopolitical factors such as sanctions on state-run oil firms of countries like Russia, Venezuela, and Iran are carving out a unique advantage for U.S. firms.

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