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Apr 12, 2019

Oil Rig


By Farrah Khan


Chevron is now the third largest company in the oil industry after acquiring Anadarko Petroleum. The deal consisted of a blend of cash and stock price worth about $33 billion. Shares in stocks rose over 33% for Anadarko Petroleum. The deal is scheduled to be finalized in the last two quarters of 2019. According to Chevron’s CEO, Michael Wirth, this merger will create a win-win environment for future deals in the industry. Not only would they have leverage on other vendors, this deal will create new synergies within the company’s strengths in natural gas, deep water and shale valued over $1 billion.

The Anadarko merger gives Chevron cheaper large-scale production especially to their West and East African reserves. Chevron will also have an advantage in their competition with Exxon to become the largest US shale driver for American oil production in the Permian Basin. On the other hand, Anadarko Petroleum will benefit from enhanced presence in the offshore regions of Mexico, enhancing their own infrastructure and stock prices.

The deal is still pending approval by stakeholders and is expected to be finalized in 2020. With its completion, this deal will go down in history as one of the largest mergers in the energy sector.