Categories: Business

Exxon, Chevron Reportedly Held Talks For Potential Merger To Form Second-Largest Oil Company

The chief executive officers of Exxon and Chevron reportedly held talks about the potential merger of the oils giants. The talks were held in 2020 after the coronavirus pandemic shook the entire world. People privy to the development said that the talks were to test the water before finalizing what could be one the largest mergers ever. The discussion between Exxon CEO Darren Woods and Chevron Chief Executive Mike Wirth came after the pandemic which resulted in a steep decline in demand for gas and oil. This put an enormous financial strain on both the oil firms. People said that the talks were just preliminary and are not going on. “However it could be resumed in the future.”

If the deal happens, it would bring back together with the two largest descendants of John D Rockefeller’s Standard Oil monopoly. The company was split in 1911 by US regulators and the reunion will definitely reshape the oil industry. The combined value of the company could above USD 350 billion. While the current market of Chevron is around USD 164 billion, Exxon is valued at USD 190 billion. Once reunited, they would become the world’s second-largest oil firm by production and market capitalization. They would combine produce about 7 million barrels of gas and oil per day. The first one in the world is Saudi Aramco.

But the merger could not be a cakewalk for these firms as the move could face antitrust scrutiny from the Department of Justice under the new administration. US President Joe Biden has already said that climate change is the biggest challenge for the country. Biden had said that he would push the country away from the oil industry. One of the persons familiar with the development said that the companies missed an opportunity to make a deal under the Trump administration. Donald Trump was seemed to be more friendly to the industry. Several such deals were seals last year, including a USD 5 billion takeovers of Noble Energy by Chevron.

Elizabeth Moseley

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