ExxonMobil nears $60 billion deal to buy Pioneer, become top US oil producer

The deal would also pave the way for what would be the energy giant’s biggest acquisition since merging with Mobil Corp. in 1999.

As per the report, the agreement between two of the biggest acreage holders in the Permian Basin of Texas and New Mexico would be completed soon due to negligible complications in the deal.

Exxon-Pioneer deal potential outcomes:

Bloomberg report citing WSJ said that the deal with Pioneer would make Exxon the biggest oil field producer with an output of about 1.2 million barrels a day — more than many OPEC nations.

Exxon’s inventory of top-tier drilling locations will also get extended if the deal happens, providing low-cost, low-risk crude well beyond 2050 to feed its giant refinery network on the Gulf Coast.

Exxon has been on the lookout for acquisitions in the Permian for years but has struggled with timing.

The company’s finances took a hit during the pandemic as oil prices plunged. At that time, the company ramped up capital spending on large global projects, forcing Exxon to borrow billions of dollars to pay shareholder dividends.

But after pulling back on spending, and cutting costs, Exxon’s profits surged to a record $59 billion in 2022.

In July this year, Exxon’s CEO Darren Woods told investors that the company would continue to review potential M&A, but would remain “picky”.

On the other hand, Pioneer founder and Chief Executive Officer Scott Sheffield may retire by year’s end.

Sheffield has worked in the Permian since the 1970s and is credited as an architect of the shale boom that made the US an oil powerhouse.

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Updated: 06 Oct 2023, 08:30 AM IST