It’s been reported that Exxon and Chevron have been having discussion regarding merging and creating the world’s second largest oil company. These conversation between the two CEO’s (Chevron – Mirk Wirth and Exxon Mobil – Darren Woods) started during the early stages of the pandemic which devastated the oil sector. The talks however were only preliminary and are not on going, but they could resume later on.
If this collaboration were to happen then that would make this the second largest oil company in the world just by market capitalization and production the largest oil company however will remain as Saudi Aramco. Even though this has been reported a Chevron spokesperson said they were not going to comment on market speculation and Exxon has not responded to a comment request either.
It hasn’t been an easy year for the oil industry with the pandemic hitting the travel and tourism industry hard there by bringing down the sale of jet fuel, diesel and gasoline. But of course the oil prices have bounced back this year after the brutal hit it took in 2020 where the US crude oil fell into negative numbers for the first time.
Exxon is the largest oil producer in the US and apart from the pandemic they had other pressing issues including the ousting from Dow Jones Industrial Average in august and a reported SEC investigation and the reported losses in the first 3 quarters of 2020. Chevron although a close second in the oil production race in the US did not have it any easier as they were thrashed by the demand for crude oil dropped and the company took steps to reduce cost and streamline operations.
The market capitalization for Exxon is 190 billion and Chevron is 164 billion. It was just last week that S&P global ratings placed several big oils companies which included Chevron and Exxon on notice that it could soon downgrade their credit ratings due heightened concerns about climate change and the global push towards greener energy.
The Agency which is one of the most influential rating firms in the stated that it could ultimately downgrade the ratings of Chevron, Exxon, Shell and Total among others. It has been noted by many professionals that this proposed merger between Chevron and ExxonMobil would ideally bring back together two companies borne after John D. Rockefeller’s standard oil monopoly was broken up in 1911.
