Chevron to buy Hess for $53 billion in second oil blockbuster in two weeks

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LONDON — Chevron Corp. said early Monday it will buy Hess Corp. for $53 billion in the second massive U.S. oil deal in two weeks, in another bet that fossil fuels will drive energy profits for a lot longer than most governments or Wall Street analysts expect.

San Francisco-based Chevron said it would pay $171 a share for New York-based Hess, higher than it’s close of $163 per share on Friday. The deal follows Exxon Mobil’s announcement two weeks ago that it will buy Pioneer Natural Resources for $58 billion and will likely trigger scrutiny by federal regulators because of the sheer mass and speed of the industry consolidation.

The two deals will be the subject of intense controversy in coming weeks as international climate officials and climate activists from around the world converge with energy executives in Dubai for the United Nations annual climate summit, COP28, in early December.

Battle lines between renewable energy forces and the fossil fuel industry have hardened this year as extreme heat and volatile weather and wildfires have created a climate emergency in many countries and renewed calls for governments to reduce oil and gas production. COP28 is being hosted by the UAE and the summit’s current president, Sultan Al-Jabar, is himself the head of the country’s largest fossil fuel company, leading to criticism the summit has been taken over by the fossil fuel industry.

Exxon’s purchase of shale giant Pioneer was notable in that the company decided to go all in on fossil fuels instead of hedge its bets by buying a wind or solar company. Chevron’s deal will only strengthen the argument among oil and gas lobbyists that the federal government needs to support the industry as it enters a new consolidation phase.