Occidental buying CrownRock in $12 billion deal
Occidental is buying oil and gas company CrownRock in a cash-and-stock deal valued at about $12 billion.
“We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin,” Occidental President and CEO Vicki Hollub said in a statement, referring to the vast oil and gas fields in western Texas.
US domestic oil production hit an all-time high in October.
The US Department of Energy’s Energy Information Administration reported that American oil production in the first week of October hit 13.2 million barrels per day, passing the previous record set in 2020 by 100,000 barrels.
The acquisition of CrownRock by Occidental comes at a time when there’s increasing consolidation in the energy sector. Some companies are spending heavily to increase their positions in various oilrich areas. This includes the Permian Basin, a massive oilfield that straddles the border between Texas and New Mexico. Drilling the Permian accounted for 18% of all US natural gas production last year, according to the US Energy Information Administration.
In October Exxon Mobil announced that it was buying Pioneer Natural Resources in an all-stock deal valued at $59.5 billion, creating a colossal fracking operator in West Texas. The deal with Pioneer Natural vastly expands Exxon’s presence in the Permian Basin. That same month, Chevron said that it was buying Hess Corp. for $53 billion. Chevron said at the time that the acquisition of Hess adds a major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota.
But on Friday the Federal Trade Commission announced that it is investigating Chevron’s acquisition of Hess, requesting additional information and documentary materials related to the proposed deal. That announcement came just days after the FTC said that it was looking into Exxon’s proposed acquisition of Pioneer.
The inquiries come after Senate Majority Leader Chuck Schumer and 22 other Democratic senators urged the FTC to investigate the two deals. Schumer said Friday the Chevron-Hess merger would lead to “higher prices at the pump for families even while Big Oil profits keep going up and up.’’