Rival mulls gatecrashing Chevron’s $50bn deal to take over Anadarko

Move catapults US oil giant into ‘ultramajor’ league as it becomes the biggest player in country’s shale

CHEVRON hopes to swallow its smaller US rival Anadarko in a milestone $50bn (£38bn) deal for the US oil sector that will catapult the company into the league of “ultra-major”.

However, its $65 a share stock-andcash deal, which represents a near 40pc premium to Anadarko’s previous closing price, could already be under threat from a counter bid by Occidental Petroleum. The interloper had reportedly offered a $70 a share takeover bid to lay claim to the US’S largest independent oil and gas producer before Chevron’s winning bid, and is considering a counter offer.

The tug of war over Anadarko is the US’S first major move towards consolidation since the global oil downturn as the US shale industry returns to form.

Michael Wirth, Chevron’s chief executive, said the deal will cement the major’s strong position within the Permian shale basin while building on its deepwater Gulf of Mexico capabilities and growing its burgeoning liquefied natural gas (LNG) business.

“It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short cycle, higherreturn investments,” Mr Wirth said.

Oil industry experts at Wood Mackenzie said the deal means Chevron will “join the ranks of the ultra majors” alongside Exxonmobil and Royal Dutch Shell. “This is the biggest upstream deal since Shell and BG in 2015. Once the deal closes, Chevron will be the second-largest producing major, in 2019 terms. It was fourth,” said Woodmac’s Roy Martin.

“The acquisition makes the majors’ peer group much more polarised. Exxonmobil, Chevron, Shell and BP are now in a league of their own,” he added. The deal also catapults Chevron to the lead among US shale players, according to Jarand Rystad of Rystad Energy, by combining Anadarko’s position in “the sweetest spot of the Permian Delaware basin” with its “strong legacy position in the same area”.

Chevron’s rationale mirrors Royal Dutch Shell’s 2016 takeover of BG Group, which transformed the Anglodutch giant into a global leader in deepwater oil development and the LNG market for a price of £36bn.

Chevron will also gain Anadarko’s key Mozambique gas projects, which are expected to ship cargoes of LNG to Britain by the mid-2020s through a $25bn joint-supply deal with British Gas owner Centrica and Tokyo Gas.

The terms of the deal mean Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share, valuing the equity at a total of $33bn.

The total enterprise value of the deal is $50bn, the company said.