Exxon and Chevron discussed merger early in pandemic

• The CEOs of Exxon and Chevron discussed the merger of the two largest US oil companies, the Wall Street Journal reported.
• The talks took place at the very start of the pandemic, which hit the energy sector.
• Visit the Business Insider homepage for more stories.

Exxon and Chevron discussed the oil company merger last year, a move that would likely have created the world’s second-largest oil company, The Wall Street Journal reported on Sunday.

Discussions between Chevron CEO Mike Wirth and Exxon Mobil CEO Darren Woods took place at the very onset of the coronavirus pandemic, which hit the oil industry, the Journal reported, citing a source close to it. folder. The talks were preliminary and are not underway, although the two CEOs could resume talks, the Journal said.

If the merger were to take place, it would likely make the resulting company the second-largest oil company in the world by market capitalization and production, according to the Journal. Saudi Aramco is the world’s largest oil company.

A Chevron spokesperson did not comment on the Journal report, telling Insider “that we do not comment on market rumors or speculation.” Exxon did not immediately respond to Insider’s request for comment.

The oil industry has been hit hard by the pandemic, with reduced travel drastically reducing demand for jet fuel, diesel and gasoline. Oil prices have rebounded this year after a brutal spring 2020 in which U.S. crude fell into negative territory for the first time.

Read more: How Exxon Mobil went from being the world’s most valuable company to being kicked out of the Dow and laying off thousands in less than a decade

Exxon, America’s largest oil producer, has faced pressure from a number of events, including its ouster from the Dow Jones Industrial Average in August and an SEC investigation into allegations the company overvalued a key oil and gas property in the Permian Basin of Texas. It also recorded losses in the first three quarters of 2020; Fourth quarter results will be released on Tuesday.

Chevron has also been hit by declining demand for crude oil. Late last year, America’s second-largest oil producer took steps to cut costs and streamline operations. He also asked employees around the world to reapply for positions, Reuters reported. Last week, the company reported a fourth quarter loss.

Exxon and Chevron have market caps of $ 190 billion and $ 164 billion, respectively.

Last week, S&P Global Ratings warned several major oil companies, including Chevron and Exxon, that it may soon lower their credit ratings amid heightened concerns about climate change and a global push for greener energy.

The agency – one of the three most influential rating companies in the world – said it could eventually downgrade the ratings of Chevron, Exxon, Shell and Total, among others.

The Journal noted that the proposed merger between Chevron and ExxonMobil would bring two of the companies brought together after John D. Rockefeller’s Standard Oil monopoly broke in 1911.