Chevron is buying Hess Corp. for $53 billion as the biggest U.S. oil companies use a recent windfall in profits to buy up smaller competitors, Chevron said in a press release Monday. In this 2017 image, motorist pulls into a Chevron gas station in Oakland, Calif. announced
it would acquire shale driller Pioneer Natural Resources for $60 billion. The deals signal that energy companies are betting on fossil fuels for the long haul even as policymakers are pressing the transition to cleaner energy options in the face of climate change.The consolidation also comes as the major energy players are flush with cash following the run-up in crude prices in the aftermath of the Russian invasion of Ukraine in February 2022.
Oil prices have been on a wild ride ever since. They spiked more than 40 percent after the unprovoked attack, then moderated toward the end of 2022. But they have been trending upward more recently, spurred first by Saudi Arabian supply cutbacks and then by fears of a broader Middle East war amid the violence in Israel.West Texas Intermediate crude, the U.S. benchmark stood around $87 per barrel as of Monday morning, up 11 percent over the past six months.
Through Hess, Chevron acquires a large stake in Guyana’s Starbroek block, which it heralded as the world’s largest oil discovery in the last 10 years. “I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come,” John Hess, CEO of the acquired company, said in a statement.
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