Another Big Oil Deal Despite Regulatory Pushback and Market Volatility

ConocoPhillips had been on the prowl for deals before making a bid for Marathon Oil.Credit…Chris Helgren/Reuters

Another mega oil deal

Bullish predictions for $100 crude oil may not have come to fruition, but that hasn’t stopped the deal frenzy in the fossil fuel sector.

The latest: The Houston-based company ConocoPhillips has agreed to acquire its smaller rival, Marathon Oil, in an all-stock deal that values the company at $22.5 billion, including debt.

The news comes a day after Hess shareholders approved Chevron’s $53 billion takeover in a contentious vote.

The oil majors have pulled off some of the biggest deals in the past year despite tough regulatory scrutiny from the Biden administration and volatility in the oil market. Still, the U.S. giants are sitting on record profits, giving them the firepower to acquire smaller drillers with operations in the oil-rich Permian Basin and in the Gulf of Mexico.

There was $250 billion in sector M.& A. activity in the past year, according to Reuters, including Exxon Mobil’s $60 billion acquisition of Pioneer Natural Resources and the Chevron-Hess tie-up.

Even after Tuesday’s vote, Chevron still faces obstacles in its push for Hess, which has a lucrative stake in an oil project in Guyana. But Exxon is contesting the deal, arguing that it should have had right of first refusal to buy Hess’s Guyana stake before the company struck an agreement to sell itself to Chevron.