Collin Eaton and Peter Stiff of The Wall Street Journal report that major oil companies are doubling down on fossil fuels following a recent prediction by the International Energy Agency that fossil-fuel demand globally would reach its zenith this decade. They write:
Chevron said it would buy Hess in an all-stock deal worth $53 billion in the second major oil tie-up this month, after Exxon Mobil’s deal to buy Pioneer Natural Resources.
The U.S. energy company said buying Hess would upgrade and diversify its portfolio, marking Chevron’s entrance into an Exxon-led partnership overseeing a generational oil find in Guyana, while picking up additional U.S. shale assets largely in North Dakota.
The transaction, less than two weeks after Exxon’s acquisition of Pioneer, shows America’s second-largest oil company is similarly tying its future to a bet that the world will continue to have an appetite for oil for decades, even as many countries are seeking to cut emissions and transition toward green energy.
The major oil companies’ doubling down on fossil fuels follows a recent prediction by the International Energy Agency that fossil-fuel demand globally would reach its zenith this decade.
“These are two great American companies coming together to be even stronger at a time when investment in American energy is important from the standpoint of jobs and from the standpoint of energy security,” Chevron Chief Executive Mike Wirth said in an interview on Monday.
The deal values Hess at $171 a share based on Chevron’s closing price on Friday, with Hess shareholders receiving 1.025 shares of Chevron for each Hess share. The price represents a premium of 4.9% from Hess’s closing share price on Friday and 10.3% when compared with the stock’s 20-day average price. […]
Hess was founded in 1933 by John Hess’s father Leon, the former owner of the New York Jets football team. Hess said his company’s legacy began about 90 years ago with his father “delivering fuel oil in a secondhand truck during the Depression.”
In recent years the company has sold off some assets in various countries to focus on its core operations. It is also known for its sale of toy trucks around Christmas, a tradition that Hess and Wirth said on Monday would continue.
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