Occidental Petroleum Buys CrownRock For $12 Billion In Cash And Stocks

Occidental Petroleum (Oxy) is buying oil and gas company CrownRock in a cash-and-stock deal valued at about $12 billion.

The acquisition of CrownRock by Occidental comes at a time when there’s increasing consolidation in the energy sector. I Photo: Occidental Petroleum

“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, referring to the vast oil and gas fields in western Texas. Michelle Chapman reported for the Associated Press (AP).

US domestic oil production hit an all-time high in October.

The US Department of Energy’s Energy Information Administration (EIA) reported that US oil production in the first week of October hit 13.2 million barrels per day, surpassing the 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.

Companies are spending heavily to increase their positions in many oil-rich areas, including the Permian Basin, an oilfield that straddles the border of Texas and New Mexico. Drilling in the Permian accounted for 18% of all US natural gas production last year, the EIA said.

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 (FTC) announced that it is investigating Chevron’s acquisition of Hess. That announcement came just days after the FTC said that it was looking into Exxon’s proposed acquisition of Pioneer.

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