In a significant move, Exxon Mobil (NYSE:), led by CEO Darren Woods, is poised to acquire Pioneer Natural Resources (NYSE:) for $59.5 billion. The deal, announced on Wednesday, marks a strategic shift for Exxon from its traditionally conservative investment approach. This acquisition further emphasizes Exxon’s commitment to fossil fuel production, despite growing global climate change concerns.
The acquisition is set to centralize Exxon’s operations in Texas, the Gulf of Mexico, and Guyana—regions that have remained unaffected by significant policy shifts against fossil fuels amid the Biden administration’s push for renewable energy. Exxon is also making strides in pioneering carbon capture technology as part of its efforts to offset greenhouse gas emissions.
Pioneer Natural Resources, under the leadership of the soon-to-retire CEO Scott Sheffield, holds significant influence in the Permian basin. The acquisition will bolster Exxon’s oil and gas supplies from this region. These resources will be subsequently converted into various products at facilities such as Exxon’s Golden Pass terminal.
This strategic move positions Exxon as the dominant player in the Permian basin, outpacing Chevron (NYSE:) and rivaling Occidental Petroleum (NYSE:). It comes at a time of record U.S. oil production and industry consolidation following the Russian invasion of Ukraine.
Prior to this acquisition, Pioneer had expanded its own footprint in the Permian basin through the acquisitions of Parsley Energy (NYSE:) and DoublePoint Energy. Furthermore, Exxon recently acquired Denbury, a Texas-based energy company with capabilities in carbon dioxide transport.
This acquisition marks a departure from Exxon’s historically conservative approach, which was marked by its ill-fated acquisition of XTO Energy under former CEO Rex Tillerson. The deal with Pioneer Natural Resources signifies Exxon’s continued commitment to fossil fuel production, even as it ventures into carbon capture technology to balance environmental concerns.
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