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A12 BUSINESS
Tuesday 24 OcTOber 2023
Chevron buys Hess for $53 billion, 2nd

megadeal in the oil patch this month

as energy prices soar

plans to increase our peer-
leading dividend growth
and share repurchases.”
Chevron is paying for Hess
with stock.
Hess shareholders will re-
ceive 1.0250 shares of
Chevron for each Hess
share.
Including debt, Chevron
valued the deal at $60 bil-
lion.
A Chevron logo rests on the gas dispenser at a gas station in And even with alarms be-
Columbus, Miss., Monday, Oct. 23, 2023. ing raised over climate
Associated Press change after a summer of
record-smashing temper-
By MICHELLE CHAPMAN Administration, “they raise atures, elevated energy
AP Business Writer the potential for oil supply prices have driven more
Chevron is buying Hess disruptions and higher oil exploration and more drill-
Corp. for $53 billion and it’s prices.” ing, and big payouts for in-
not even the biggest ac- Chevron said Monday that vestors.
quisition in the energy sec- the acquisition of Hess adds There have been a number
tor this month as major pro- a major oil field in Guyana of acquisitions focused on
ducers seize the initiative as well as shale properties U.S. shale fields and anoth-
while oil prices surge. in the Bakken Formation in er round of consolidation
Crude prices rose sharply North Dakota. Guyana is in the energy sector be-
in early 2022 with Russia’s a South American coun- gan during the pandemic
invasion of Ukraine and are try of 791,000 people that as big producers sought to
hovering around $90 per is poised to become the cut costs. In the summer of
barrel after ticking another world’s fourth-largest off- 2020, Chevron announced
9% higher this year. That shore oil producer, plac- that it was buying Noble
has made big drillers cash ing it ahead of Qatar, the Energy for $5 billion. Chev-
rich and they are looking United States, Mexico and ron made the deal when
for places to invest. Norway. It has become a crude prices were down
The Chevron-Hess deal major producer in recent more than 30% in the midst
comes less than two weeks years with oil giants, includ- of the coronavirus pan-
after Exxon Mobil said ing Exxon Mobil, China’s demic. That same year,
that it would acquire Pio- CNOOC, and also Hess, ConocoPhillips bought
neer Natural Resources for squared off in a heated shale producer Concho
about $60 billion. competition for highly lu- Resources in an all-stock
Upward pressure on oil crative oil fields in northern deal valued at $9.7 billion.
prices are being applied South America. Last month Britain gave
from a number of fronts in- “This combination is aligned the go-ahead for a major
cluding the war in Ukraine. with our objective to safely oil and gas project in the
Oil markets are being deliver higher returns and North Sea, ignoring warn-
stretched by cutbacks in lower carbon,” Chevron ings from scientists and the
oil production from Saudi Chairman and CEO Mike United Nations that coun-
Arabia and Russia, and Wirth said in prepared re- tries must stop developing
now, a war between Israel marks. “In addition, Hess in- new fossil fuel resources if
and Hamas runs the risk of creases Chevron’s estimat- the world is to avoid cata-
igniting a broader conflict ed production and free strophic climate change.
in the Middle East. While cash flow growth rates over Chevron said the deal
attacks on Israel do not dis- the next five years, and is will help to increase the
rupt global oil supply, ac- expected to extend our amount of cash given
cording to an analysis by growth profile into the next back to shareholders. The
the U.S Energy Information decade supporting our company anticipates that
in January it will be able
to recommend boosting
its first-quarter dividend by
8% to $1.63. This would still
need board approval. The
company also expects to
increase stock buybacks
by $2.5 billion to the top
end of its guidance range
of $20 billion per year once
the transaction closes.q