Exxon and Chevron discussed the merger in the early days of the pandemic

• Exxon and Chevron CEOs discussed the merger of the two largest U.S. oil companies, the Wall Street Journal reported.
• The talks came in the early days of the pandemic that ravaged the energy sector.
• Visit the Business Insider homepage for more stories.

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

The talks between Chevron CEO Mike Wirth and Exxon Mobil CEO Darren Woods took place in the early days of the coronavirus pandemic, which battered the oil sector, the Journal reported, citing a source familiar with the matter. Talks were preliminary and are not underway, although the two CEOs could resume talks, the Journal said.

If the merger happened, the next company would likely become the world’s second largest oil company in terms of market capitalization and production, the Journal said. Saudi Aramco is the world’s largest oil company.

A Chevron spokesman did not comment on the Journal’s report, telling Insider “we will not comment on rumors or market 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 requirements drastically reducing the demand for jet fuel, diesel and gasoline. Oil prices have rebounded this year after a relentless spring of 2020 when US crude oil entered negative territory for the first time.

Read more: How Exxon Mobil changed from the world’s most valuable company to start-up of the Dow and thousands layoffs in less than a decade

Exxon, the largest US oil producer, has faced pressures from a number of events, including the displacement of the Dow Jones Industrial Average in August and a reported SEC investigation into allegations that the company has a major oil and gas property in the Permian Basin. in Texas. It also recorded losses in the first three quarters of 2020; The fourth quarter results will be announced on Tuesday.

Chevron is also being hammered by the decline in crude oil demand. At the end of last year, the second largest oil producer in the US took measures to reduce costs and streamline operations. It also asked employees around the world to reapply, Reuters reported. Last week, the company reported a loss in the fourth quarter.

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

Last week, S&P Global Ratings informed several major oil companies, including Chevron and Exxon, that it could soon downgrade their credit due to heightened concerns about climate change and a global push for greener energy.

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

The Journal noted that the proposed merger between Chevron and ExxonMobil would reunite two of the companies formed after John D. Rockefeller’s Standard Oil monopoly was lifted in 1911.