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Business News/ Companies / Oil megadeal: Chevron to buy Hess for $53 billion
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Oil megadeal: Chevron to buy Hess for $53 billion

The acquisition will expand Chevron's scale of operations in South America's Guyana, which is emerging as one of the world's fastest growing oil basins.

Genesis, a Chevron Corp. off-shore oil production platform, is seen from the air, in the Gulf of Mexico. Photographer: Stephen Hilger/Bloomberg News/FilePremium
Genesis, a Chevron Corp. off-shore oil production platform, is seen from the air, in the Gulf of Mexico. Photographer: Stephen Hilger/Bloomberg News/File

The US-based petroleum refineries company Chevron Corp on October 23 announced that it has entered into an agreement to acquire Hess Corp, a smaller rival oil firm, for $53 billion in an all-stock deal.

The acquisition will expand Chevron's scale of operations in South America's Guyana, which is emerging as one of the world's fastest growing oil basins.

Hess, along with Exxon Mobil and China's CNOCC, cumulatively produced 400,000 barrels per day of oil from Guyana's two offshore projects in recent years. These entities could develop up to 10 offshore projects in the region, Bloomberg News reported.

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"With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases," the news agency quoted Chevron's chief financial officer Pierre Breber as saying.

As per the proposed terms of the deal, Chevron is offering $171 for each share of Hess. The per-share price is higher than 4.9 percent as against the previous close.

The deal positions Chevron squarely against its rival Exxon Mobil in the key oil basin of Guyana. The development also comes weeks after Exxon announced that it has offered to acquire Pioneer Natural Resources for $60 billion.

The acquisition of Pioneer would make Exxon the biggest oil field producer with an output of about 1.2 million barrels a day — more than many OPEC nations, The Wall Street Journal had reported.

The deal would also pave the way for what would be the energy giant’s biggest acquisition since merging with Mobil Corp. in 1999.

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Published: 23 Oct 2023, 03:40 PM IST
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