GulfSlope Energy Inc (GSPE)

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Big Oil’s Mega Acquisitions Raise Questions About Peak Oil Demand

A few excerpts:

Exxon made $56 billion in net earnings last year. This year, it used a sum slightly higher than the 2022 net total to acquire Pioneer Natural Resources, establishing itself as the leader in U.S. shale.

Two weeks later, Chevron, which had reported a twofold increase in profits last year, said it would take over peer Hess for $53 billion. Who’s next?

All industry observers seem to agree that the time was ripe for a consolidation wave in U.S. oil.

“We live in the real world, and have to allocate capital to meet real world demands,” Chevron’s chief executive Mike Wirth recently told the FT in an interview, adding that demand for oil will continue to grow beyond 2030.

Indeed, in its most recent forecast, OPEC said that oil demand will continue expanding until at least 2045, bringing into sharp relief the consistent underinvestment that has been a trend for years in the industry. 

But now investors are returning to oil and gas, and they want some of those returns. For that, and to secure the supply of a critical commodity in a world still very much dependent on it, the oil majors need access to more production assets. In an environment with a shortage of unexplored assets, securing that access is much easier done through acquisitions.

“It is an arms race,” one source involved in M&A activity told the FT. “In most sectors, deal one doesn’t necessarily lead to deal two and deal three. I believe in this case it will, because timing is of the essence and the two largest players have made their moves.”

Link to article:

https://oilprice.com/Energy/Energy-General/Big-Oils-Mega-Acquisitions-Raise-Questions-About-Peak-Oil-Demand.html




Mrs. Smith