US oil giant Chevron agreed to buy smaller rival Hess Corp for $US53 billion , a deal aimed at boosting production growth as the US oil industry bets on an enduring future for fossil fuels.
The deal is the latest bet from an oil giant that fossil fuels will remain central to the world’s energy mix for decades ahead.The acquisition will give Chevron a significant foothold in Guyana, the South American country that is one of the world’s newest oil producers. It will enable faster production growth and more generous returns to investors, according to the statement.
The deal comes as a new wave of consolidation is reshaping the energy landscape. Exxon Mobil announced earlier this month it agreed to buy shale-oil producer Pioneer Natural Resources for $US59.5 billion , locking up new drilling sites for years to come and underpinning a bet that oil and gas will remain central to the world’s energy mix for decades ahead.“It’s an eat or be eaten world,” said Cole Smead, who helps manage $US5.3 billion including US energy stocks at Smead Capital Management.
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