Chevron looking to buy Hess
Chevron waded into M&A world in a major way on Monday, agreeing to buy Hess for $53 billion in an oil deal that for once does not really involve the U.S. Permian Basin, the big Texas field. No, Hess is most well-known for its operations in the Bakken region in North Dakota and its partnership with Exxon in Guyana, the Latin American nation that is fast becoming an important producer after major discoveries offshore in recent years.
The deal will oddly put Chevron in partnership with its biggest rival, as the Exxon/Hess/CNOOC tie-up is the only major operation in Guyana. But the deal also diversifies Chevron’s portfolio, as it had a big presence already in Texas but not further north, and of course means it will continue to press on big oil investments – though some were surprised because Exxon’s giant purchase of Pioneer Natural earlier this month for $60 billion seemingly took them off the playing field. "We would have thought Chevron could bide its time, and hence we are a little surprised at the timing of this deal," said analysts at RBC.