Chevron is buying Anadarko Petroleum for $33 billion, energizing its oil and gas drilling capabilities in Texas and the Gulf of Mexico while vaulting itself into a new league.
The combined company will remain far behind Exxon Mobil Corp. and Royal Dutch Shell Plc. in market capitalization, but Chevron will jump from being the world’s fourth biggest energy producer, to second, according to Wood Mackenzie.
“Chevron now joins the ranks of the UltraMajors — and the big three becomes the big four,” wrote Roy Martin, senior analyst at Wood Mackenzie, referring to Exxon, Shell and BP.
The cash-and-stock deal announced Friday comes as U.S. crude prices have shot up 40% this year.
Chevron gets access to Anadarko’s liquid natural gas operations in Mozambique and it would control a 75-mile-wide corridor across the Delaware Basin, a region bountiful with natural gas.
Oil prices have been on the rise as OPEC members cut production.
OPEC said this week that its output had been slashed by more than a half million barrels a day last month to just over 30 million barrels, a level not seen since early 2015.
That is largely being driven by the energy powerhouse Saudi Arabia, which last month removed another 324,000 barrels of oil per day from the market.
U.S. crude was selling for nearly $65 per barrel Friday.