Chief executives of US oil companies ExxonMobil and Chevron held preliminary talks in early 2020 to investigate whether the two largest US oil producers would be combined in what would have been the largest merger of all time, according to those familiar with the case.
The discussions, which are no longer underway, are seen as a test of the massive corporate marriage after the coronavirus pandemic shocked the world last year, the Wall Street Journal reported Sunday.
Such ensuing discussions are indicative of the pressures facing the most dominant companies in the energy sector when Covid-19 took hold and crude oil prices plummeted.
Talks between Exxon CEO Darren Woods and Chevron CEO Mike Wirth were serious enough to draft legal documents pertaining to certain aspects of the merger talks, one source told Reuters.
Sources asked for anonymity as the matter is confidential. Exxon and Chevron, which have market caps of $ 190 billion and $ 164 billion respectively, declined to comment on Sunday.
The talks were described as preliminary and although not ongoing, they could come back in the future.
Such a deal would reunite the two largest descendants of John D Rockefeller’s Standard Oil monopoly, which was lifted by US regulators in 1911, and reshape the oil industry, the Journal reported.
The market value of a combined company could exceed $ 350 billion, creating the world’s second largest oil company by market capitalization and output, second after Saudi Arabia’s state oil producer Aramco.
Such a major US oil merger could face regulatory and antitrust hurdles in the new Biden, which the US has reintroduced into the Paris climate accords.
Last week, Biden signed new environmental orders, in which he said the climate crisis was an existential threat that required urgent action, and presented his team, including former Secretary of State John Kerry as the US’s new global envoy to the climate.
During last October’s election campaign, Biden said he would urge the US to “move away from the oil industry.”
One of those familiar with the talks told the Journal that the parties may have missed an opportunity to close the deal under former president Donald Trump, who withdrew from the Paris Agreement and had a powerful relationship with the fossil. fuel industry.