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Acquisition advances Permian’s role in Chevron’s future

Posted on May 14, 2019

Just last month, Chevron joined ExxonMobil in announcing plans to leverage their Permian Basin assets into almost 2 million barrels of new oil output in the next five years.

Friday, Chevron took a major step in its goal of reaching 900,000 barrels of production per day from its Permian unconventional assets by agreeing to acquire Anadarko Petroleum for $33 billion. Anadarko referred requests for comment to Chevron.

“Anadarko’s high-quality assets, particularly here in the Permian, are a natural fit for Chevron. The announcement underscores both our commitment to the future of the Permian region and our confidence that we can leverage the best of both companies to deliver industry leading results,” Jeff Gustavson, vice president of Chevron Mid-Continent Business Unit, told the Reporter-Telegram by email.

He noted that the acquisition will create a 75-mile-wide corridor across the most attractive acreage in the Delaware Basin, “extending Chevron’s leading position as a producer in the Permian.”

While Chevron’s 800 employees in its Midland campus and the several hundred Anadarko employees awaiting the completion of Anadarko’s new campus just across Deauville Boulevard from Chevron wonder how the acquisition will affect them, Chevron officials are trying to downplay concerns about layoffs, especially among Anadarko’s 4,700 employees companywide.

Chevron Chief Executive Officer Mike Wirth told the Houston Chronicle that “one of the great opportunities when you combine two really good companies with great people is to create an even better workforce than ever before.”

Gustavson told the Reporter-Telegram, “At this time, we are focused on completing the transaction in the second half of 2019, subject to Anadarko shareholder approval, regulatory approvals and other customary closing conditions. An integration team will be formed by members of both companies with the goal of forming an integrated organization ready to safely and effectively manage the world-class assets and opportunities of the combined company.”

Energy Economist Karr Ingham told the Reporter-Telegram that the news speaks to the Permian Basin’s global importance as an energy producer.

“We’ve witnessed these cycles where majors and large independents have a presence, then leave, and then are drawn back again. Now the majors are being drawn back again because this is a region of global importance.”

He continued, “It’s not like Chevron hadn’t put down roots in the Permian Basin. It’s evident by their footprint that they’re playing the long game.” 

https://www.mrt.com/business/oil/article/Acquisition-advances-Permian-s-role-in-13763925.php