New oil megamerger in the US collides with calls for energy transition

The American oil giant ConocoPhillips announced this Wednesday that it will buy its competitor Marathon Oil in a deal estimated at US$22.5 billion, as the sector faces pressure over its impact on climate change.

This is the latest announcement in a series of large acquisitions in the US oil sector, which clash with calls for a transition to green energy.

Previously they announced purchase agreements ExxonMobil and Pioneer Natural Resources for US$60 billion, Chevron and Hess for 53 billion, and Occidental Petroleum and CrownRock for 12 billion.

This operation will allow ConocoPhillips to strengthen its position in areas rich in shale oil and gas, such as the Bakken basin in the north and the Permian basin in the south.

The merger will provide a “significant potential for synergies” stated Ryan Lance, CEO of ConocoPhillips.

This purchase will allow “add highly complementary areas to ConocoPhillips’ onshore portfolio in the United States, with 2 billion barrels of additional reserves”the Texas-based companies indicated in a statement.

ConocoPhillips expects to save US$500 million in the years following the acquisition thanks to “reducing administrative costs” and production.

The oil giant plans to continue rewarding its shareholders with share buyback operations for more than US$20 billion in the three years following the purchase, of which US$7 billion will be distributed in the first year, the note details.

The deal is expected to close in the fourth quarter of this year.

The amount of the operation includes Marathon Oil’s liabilities of US$5.4 billion.

Marathon Oil shareholders will receive 0.255 ConocoPhillips shares per share, a 14.7% premium to Tuesday’s closing price.

This Wednesday, ExxonMobil meets with its shareholders who will be able to express themselves about the way in which the company reacted to recent criticism for its position on climate change.

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