With increasing turmoil in the Middle East and protracted war in Eastern Europe, two of the world’s biggest energy firms are keeping their investments closer to home, according to The Wall Street Journal (subscription).
What’s going on: “Chevron on Monday said that it was acquiring Hess in a $53 billion deal that gives it access to one of this century’s biggest oil finds in the South American country of Guyana and allows it to double down on shale by expanding its presence to North Dakota.”
- “The deal follows a megadeal in the U.S. shale patch by Exxon Mobil, which this month acquired Pioneer Natural Resources PXD in a $60 billion merger that anchors its future to the prolific Permian Basin of West Texas and New Mexico.”
Why it’s important: The investments show large energy companies’ increasing focus on the West.
What it means: As the companies have refocused their efforts in the Western Hemisphere, both have “said their recent shale acquisitions [will] strengthen U.S. energy security.”
The Guyana factor: “Guyana’s proximity to the U.S. and relatively stable politics are similarly appealing to the … companies. The country has exhibited respect for contracts for oil concessions there, allowing Exxon and Chevron to tout their investments as low-risk projects that will deliver new oil barrels to the U.S., potentially lowering gasoline prices, analysts said.”