Sustainability environmentalists are getting spanked. > Oil giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have announced plans to significantly increase their oil and gas production, committing over $50 billion each to major acquisitions. This move defies the International Energy Agency's (IEA) forecast of fossil fuel demand peaking by 2030 due to the rise in electric vehicle sales and renewable energy uptake.
Chevron has proposed a $53 billion acquisition of Hess (NYSE:HES), marking a significant bet on Guyana's offshore production. The deal will place Chevron firmly in Guyana's emerging oil powerhouse through Hess' stakes in the Stabroek block and three other blocks. The Stabroek block is a vital offshore oil reservoir that has elevated Guyana's status in the global oil market. As part of the agreement, Chevron will also assume control over Hess' Bakken and Three Forks shale assets in North Dakota. The share exchange agreement stipulates 1.0250 Chevron shares for each Hess share, with the deal's completion set for 2024 when John Hess will join Chevron's board.
In a parallel move, Exxon Mobil has committed to a $60 billion deal to acquire Pioneer Natural Resources (NYSE:PXD), thus enhancing its presence in the Permian Basin. These deals are seen as low-cost production investments offering stability amidst uncertain future oil supplies from Russia and Venezuela.
Oil executives argue that these mergers will facilitate more investment into cleaner fuels such as carbon capture technology and hydrogen. Scott Sheffield, CEO of Pioneer Natural Resources, disputes the IEA's forecasts, insisting on lasting demand for fossil fuels.
Despite these assertions, environmentalists criticize these actions as attempts to sustain profits from the existing business model rather than transitioning toward sustainability. Fatih Birol of the IEA emphasized that the global transition to clean energy is unstoppable. Meanwhile, Daniel Yergin, an oil historian, believes that consolidation enhances companies' resilience to meet various priorities simultaneously.
Scott Sheffield suggests that large European oil companies like Shell (LON:SHEL) and BP (NYSE:BP) will soon need to consolidate for energy security. However, the Environmental Defense Fund criticizes big oil companies for missing an opportunity to reinvent themselves, viewing these mergers as attempts to squeeze the last light out of the existing business model rather than transitioning to a sustainable future.
Read Full Story »»»
New York Yankees and Duke Basketball
