Chevron has announced it will buy the US fossil fuel producer Hess Corporation in a $53bn (£44bn) all-stock deal, as it seeks to increase its presence in oil-rich Guyana.
The tie-up puts two of the biggest oil companies, Chevron and ExxonMobil, head-to-head in two of the world’s fastest growing oil basins – Guyana and shale and.
Guyana has become a leading oil producer in recent years after huge discoveries by ExxonMobil, its partner Hess and China’s CNOOC, which together produce 400,000 barrels a day of crude from two offshore vessels and have said they could develop up to 10 offshore projects.
after newsletter promotion
To buy Hess, Chevron is offering $171 a share, a premium of about 4.9% on the stock’s last closing price. The smaller company’s chief executive, John Hess, is expected to join Chevron’s board of directors once the deal is closed in the first half of 2024.
The combined company was expected to grow production and free cash flow faster and for longer than Chevron’s current five-year guidance, the companies said.
Chevron’s vice-president and chief financial officer, Pierre Breber, said “With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases.”
This month, ExxonMobil agreed a $60bn deal to buy the shale company Pioneer Natural Resources, a move that would increase its dominance of the largest US shale oilfield, the Permian basin.
