Chevron agrees to acquire Noble Energy in $13 billion deal
Chevron has entered an agreement to acquire Noble Energy under an all-stock transaction valued at $13 billion.
Noble will add low-cost, proved reserves and attractive undeveloped resources to the group’s upstream portfolio, including low-capital, cash-generating assets offshore Israel, strengthening Chevron’s position in the Eastern Mediterranean.
Offshore West Africa, Noble has producing interests in Equatorial Guinea with further growth opportunities.
Tom Ellacott, senior vice president, corporate analysis, at Wood Mackenzie, said: “This is the first large-scale corporate acquisition of this downturn. Chevron was our top pick to lead bottom-of-the-cycle corporate consolidation arising from the oil price collapse and the COVID-19 pandemic.
“The move follows Chevron’s $50-billion bid for Anadarko in April 2019. Although of a smaller scale, the acquisition of Noble will go further in reducing the concentration of Chevron’s upstream portfolio around core anchor positions in the Permian, Australian LNG, Kazakhstan, and the US Gulf of Mexico.”
Jean-Baptiste Bouzard of WoodMac’s upstream research team, said: “Noble’s position in Israel is the company’s crown jewel. Israel will provide Chevron with a new core international geography that will rebalance the portfolio towards gas and provide a springboard to capture further upside potential in the region.
“Much of Noble’s upstream value comes from its positions in Israel and Cyprus. It would be interesting to see if the acquisition boosts development plans for Noble’s Aphrodite discovery, offshore Cyprus, as well as ramping up production from its flagship assets in Israel, Tamar and Leviathan.”
Bouzard added: “Both companies also recently entered upstream Egypt, with a focus on frontier exploration in the offshore Herodotus basin.”
Chevron is acquiring Noble Energy, giving the Houston-based group control of the Israeli Leviathan gas field and massively expanding its Mediterranean assets, Reuters reports. The acquisition likely marks the beginning of a series of consolidation agreements that will take place in the aftermath of crude oil price collapse and the continued spread of covid-19, according to the FT.
Why should you care? Noble is one of two companies that inked a USD 15 bn agreement to export natural gas to Egypt from massive Israeli gas fields, making it one of the lynchpins of Egypt’s strategy of becoming a regional energy hub for the Eastern Mediterranean.