In less than a month, the total value of M&A activity in the United States doubled from the H1 reading of $69.1 billion, with several more deals expected along the lines, such as the mooted Devon Energy-Marathon Oil deal or Chesapeake’s merger with Southwestern Energy. US oil major Chevron announced the purchase of Hess Energy for $53 billion in stock, opening up ExxonMobil’s Guyana portfolio and bringing its total oil and gas production to 3.7 million b/d of oil equivalent, OilPrice said.
Geopolitical risk keeps oil prices afloat as bearish pressure builds. Crude prices have been fighting off the risk of a downward correction for several days now, with ICE Brent having fallen below the $90 per barrel mark. The prospect of more crude from Venezuela and higher US crude inventories has been ratcheting up pressure on the physical side, while the first signs of aid reaching Palestinians in Gaza appear to be eating away at the geopolitical risk premia baked into the flat price. Eurozone macroeconomic figures have been borderline recessionary, but it seems that there would need to be a string of bad news from the US or China for the oil markets to react.
Oil prices are under an increasing amount of downward pressure, but geopolitical risk and continued production cuts from OPEC+ have helped to halt a significant drop. US oil major Chevron has counteracted Exxon’s acquisition of Pioneer Natural Resources by purchasing Hess Corp. in an all-stock deal, paying $171 per share for the US upstream firm.
The fact that both Exxon and Chevron went for crude-focused oil producers with little exposure to renewable energy highlights the difference between US companies and their European peers, increasingly bearing the burden of higher ESG pressure and less profitable operations.
Both Shell and BP, seeing their P/E ratios at almost half the levels of Exxon and Chevron, were believed to be big buyers in the E&P landscape, but now they’re left with little to no choice if they want to purchase a mid-tier established producer.
UK oil major BPis considering selling its stake in the Yakaar-Teranga offshore natural gas field in Senegal, hailed as a huge gas find, saying it no longer aligns with its strategic objectives. US oil major ExxonMobil sold its 25% stake in Germany’s Miro refinery located in Karlsruhe to a largely unknown Austria-based midstream firm Alcmene for an undisclosed sum. Algeria’s national oil company Sonatrach took a different approach to carbon storage, pledging to invest $1 billion to plant 420 million trees over the next 10 years.
Majors declare their Venezuela interest.Oil companies are planning to return to sanctions-free Venezuela as soon as possible, with services majorSLB already mobilizing resources whilst Brazilian firm Petrobrasis “seriously” considering upstream investments.
IEA sees no need for SPR replenishment.The International Energy Agency believes the current level of oil storage in member states is enough to take action in case of supply disruptions, despite the agency’s total inventories shedding 182.7 million barrels over the course of 2022.