Chevron buys Anadarko for $ 33 billion

In recent months, a question in the Texas plains: what would be the next big agreement on shale? The logic of consolidation seemed clear. The Permian Basin in Texas is the most productive oil field in the United States, despite a mosaic of plots with hundreds of homeowners. Shale companies seemed cheap and investors doubted their ability to produce both oil and profits. On April 12, the curious got their answer.

Chevron, a giant oil company, will pay $ 33 billion in cash and stock to buy Anadarko, an independent producer holding wealthy Permian assets. He will also assume Anadarko's $ 16 billion debt. This agreement makes Chevron the world's second largest publicly traded oil producer, behind only ExxonMobil. This is the last sign of the growing importance of shale for the world's largest energy companies.

The big oil companies arrived relatively late to fracking. Small independent companies were the first to tackle shale oil. They developed methods to drill not only down, but horizontally, and then assault the shale with water and sand until the rock abandoned its wealth of hydrocarbons. But the titans of the industry have been open to the idea. Unlike a complex deepwater project in a remote jurisdiction, shale offers fast drilling times, predictable cash flow and favorable US regulations. Small businesses have often cracked frantically, eager to reinvest the product and continue growing. Too frenetically sometimes; some people incur more than they can handle. Giant companies have less experience with the technique. But their diversified incomes and their greater balance sheets enable them to accumulate areas even though they drill at a more measured pace.

Last year BP, a British company, paid $ 10.5 billion to acquire the shale assets of BHP, a mining giant. ExxonMobil and Chevron have placed the biggest bets. Chevron shale reserves were large even before the agreement with Anadarko. The company controlled 1.7 million acres (690,000 hectares) in two of the most productive areas of the Permian. In March, ExxonMobil said it expects Permian production to exceed 1 million barrels a day in the next five years.

With Anadarko, Chevron's Permian production could be 60% higher than that of ExxonMobil, according to Rystad Energy, a research firm. Anadarko gives Chevron more than shale. Its assets include a liquefied natural gas project in Mozambique and a stake in the Gulf of Mexico. Nevertheless, the Permian plots of Anadarko would have been the main attraction. Thanks to them, Chevron can drill more wells more efficiently. Adjacent parcels will allow the company to move more laterally into the rock and will simplify the transportation of equipment and other inputs, such as the millions of liters of water needed to pull out the oil from each well. Chevron estimates that the deal will bring a total saving of $ 2 billion.

Some investors hope that as shale companies consolidate, they will mature and their performance will improve. Independent producers can now regroup, like Concho Resources. Last year he bought RER Permian, a rival, for $ 9.5 billion.

Meanwhile, the assets of the supermajors seem about to develop. ExxonMobil said it would consider further shale acquisitions. According to rumors, Royal Dutch Shell would weigh the purchase of Endeavor Energy, whose headquarters is located in the heart of the Permian.

Not all investors are sold on shale attractions. Follow This, a group of them concerned about climate change, expressed disappointment that Chevron would spend $ 33 billion on Anadarko, rather than on renewable energy. At its annual meeting next month, Chevron shareholders will vote on a resolution mandating the company to indicate how it can reduce its carbon footprint in accordance with the Paris climate agreement. Chevron insists that he is "well placed to win in any environment". A more environmentally friendly can be an exception.

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