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<blockquote data-quote="al97" data-source="post: 152030" data-attributes="member: 29424"><p>23 Oct - Commercial Awareness - Energy</p><p>Topic: Another Mega Energy Deal – Chevron’s $53bn Acquisition of Hess</p><p><a href="https://www.ft.com/content/f25f315f-2551-4517-a7a2-2d9418001756" target="_blank">https://www.ft.com/content/f25f315f-2551-4517-a7a2-2d9418001756</a></p><p><a href="https://www.ft.com/content/42751474-ea28-4bc2-838b-50d564b93189" target="_blank">https://www.ft.com/content/42751474-ea28-4bc2-838b-50d564b93189</a></p><p></p><p>Last week, I wrote about Exxon’s acquisition of Pioneer which will consolidate its market shares in the energy sector and analysts expect to see more acquisitions soon. Yesterday, Chevron announced its acquisition of Hess. </p><p>Exxon indicated their confidence in the future of the oil market despite the race for renewables.</p><p>Similarly, the titled acquisition is Chevron’s bold statement about their confidence in the oil market. </p><p>The share price proposed by Chevron is only 10% more than the average of Hess’s shares over the past 20 days. </p><p>In 2023, $254bn worth of M&A deals in oil and gas industries globally have been recorded, the highest since 2014. It is safe to say that oil rivals are racing to snap up resources by M&A. </p><p></p><p></p><p>Why is Hess attractive?</p><ul> <li data-xf-list-type="ul">Hess owns 30% stake in a 6.6mn acre offshore oil exploration scheme in Guyana – where Exxon is the lead operator and the 465k acre shale project</li> <li data-xf-list-type="ul">It increases Chevron's oil and gas output by more than 10% </li> <li data-xf-list-type="ul">It diversified Chevron’s portfolio of oil assets, which is very concentrated in New Mexico and Texas.</li> <li data-xf-list-type="ul">Guyana is located in South America. Its production went from 0 in 2019 to 260k barrels a day in 2022, expected to reach 480k b/d by 2023 and 1.5mn b/d by 2033. </li> <li data-xf-list-type="ul">Its output from Guyana is expected to grow faster than non-OPEC producers</li> <li data-xf-list-type="ul">The deal will equip Chevron to compete with Exxon</li> </ul><p></p><p>How is BP doing?</p><ul> <li data-xf-list-type="ul">FT reported that BP is at a vulnerable position for a takeover due to falling share price and recent resignation of the CEO.</li> <li data-xf-list-type="ul">Analyst speculated that BP tie up with Shell is possible. It is only of merger at this scale can put them in the same league with Exxon and Chevron. </li> <li data-xf-list-type="ul">Currently, BP has not made any move to pursue a merger or an acquisition. </li> </ul><p></p><p>Interview Question</p><p></p><p>Who are the biggest players in the oil industry?</p><p>BP, ExxonMobil, Chevron, Shell</p><p></p><p>What is OPEC?</p><p>It was formed by four major oil-producing countries: Kuwait, Libya, Nigeria, and Saudi Arabia to maximise the profit of the global oil market. </p><p></p><p>Name some recent news in the oil industry</p><p>Exxon’s acquisition of Pioneer; Chevron’s acquisition of Hess; BP CEO stepped down</p></blockquote><p></p>
[QUOTE="al97, post: 152030, member: 29424"] 23 Oct - Commercial Awareness - Energy Topic: Another Mega Energy Deal – Chevron’s $53bn Acquisition of Hess [URL]https://www.ft.com/content/f25f315f-2551-4517-a7a2-2d9418001756[/URL] [URL]https://www.ft.com/content/42751474-ea28-4bc2-838b-50d564b93189[/URL] Last week, I wrote about Exxon’s acquisition of Pioneer which will consolidate its market shares in the energy sector and analysts expect to see more acquisitions soon. Yesterday, Chevron announced its acquisition of Hess. Exxon indicated their confidence in the future of the oil market despite the race for renewables. Similarly, the titled acquisition is Chevron’s bold statement about their confidence in the oil market. The share price proposed by Chevron is only 10% more than the average of Hess’s shares over the past 20 days. In 2023, $254bn worth of M&A deals in oil and gas industries globally have been recorded, the highest since 2014. It is safe to say that oil rivals are racing to snap up resources by M&A. Why is Hess attractive? [LIST] [*]Hess owns 30% stake in a 6.6mn acre offshore oil exploration scheme in Guyana – where Exxon is the lead operator and the 465k acre shale project [*]It increases Chevron's oil and gas output by more than 10% [*]It diversified Chevron’s portfolio of oil assets, which is very concentrated in New Mexico and Texas. [*]Guyana is located in South America. Its production went from 0 in 2019 to 260k barrels a day in 2022, expected to reach 480k b/d by 2023 and 1.5mn b/d by 2033. [*]Its output from Guyana is expected to grow faster than non-OPEC producers [*]The deal will equip Chevron to compete with Exxon [/LIST] How is BP doing? [LIST] [*]FT reported that BP is at a vulnerable position for a takeover due to falling share price and recent resignation of the CEO. [*]Analyst speculated that BP tie up with Shell is possible. It is only of merger at this scale can put them in the same league with Exxon and Chevron. [*]Currently, BP has not made any move to pursue a merger or an acquisition. [/LIST] Interview Question Who are the biggest players in the oil industry? BP, ExxonMobil, Chevron, Shell What is OPEC? It was formed by four major oil-producing countries: Kuwait, Libya, Nigeria, and Saudi Arabia to maximise the profit of the global oil market. Name some recent news in the oil industry Exxon’s acquisition of Pioneer; Chevron’s acquisition of Hess; BP CEO stepped down [/QUOTE]
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