Chevron Corp. has reached an agreement to purchase fellow energy company Hess Corp. for a fee of $53 billion. This comes as Chevron looks to expand its market share in Guyana’s oil market, where Hess already has a strong foothold.
The deal will see Chevron receive 30% ownership of more than 11 billion barrels worth of recoverable resources in Guyana. Following the surging growth of its oil sector, the South American country is expected to produce over one million barrels of oil per day by 2026.
Peter McNally, global sector lead for industrials, materials, and energy at Third Bridge, observed that Guyana is the main priority being targeted by Chevron’s takeover of Hess. “While Hess is based in the US, the real prize in the portfolio is Guyana where in less than a decade the country has vaulted into one of the most important growth areas for non-OPEC oil production,” McNally observed.