In the Morning Brew, Cassandra Cassidy calls Exxon Mobil Corp.’s acquisition of Pioneer Natural Resources a “vote of confidence in US oil.” She writes:
Exxon Mobil, one of the world’s largest suppliers of oil, announced yesterday that it will acquire Pioneer Natural Resources, a Texas-based shale company, for roughly $60 billion in an all-stock deal set to close in 2024.
It’s a vote of confidence in US oil (and against US climate policy). Exxon evidently isn’t too concerned about the White House’s push to reduce emissions and invest in climate-friendly energy, or the International Energy Agency’s prediction of a decline in demand for fossil fuels by 2030. In addition to more than doubling Exxon’s daily output of oil and gas, the deal will:
- Give Exxon one of the world’s largest inventories of untapped oil, totaling nearly 1.5 million acres in the Permian Basin, North America’s biggest source of crude.
- Boost US energy security, according to Exxon. JPMorgan Chase predicts 45% of Exxon’s oil will come from the US.
Zoom out: After struggling during the pandemic, Exxon is now ready to spend the beaucoup cash it made when oil prices skyrocketed following Russia’s invasion of Ukraine. The merger will be the largest oil and gas deal since Exxon acquired Mobil in 1999—and could spur further consolidation in the industry.—CC
Read more here.
