After losing a lawsuit that allowed rival Chevron to acquire Hess for $53 billion, Exxon Mobil is now actively looking into acquisition possibilities. Although he stressed selectivity and long-term value, Exxon CEO Darren Woods acknowledged the company’s interest in pursuing new deals. “I think there are opportunities out there for us,” Woods said. “We’re working to see if we can’t bring some of those to fruition.”
Exxon considering acquisition opportunities amidst low profits
Woods described the $60 billion acquisition of Pioneer Natural Resources in 2023 as a “value-creating” deal because of its combination of scale, efficiency, and human capital. The comments come as the oil giant looks to expand its M&A strategy beyond that acquisition. Woods, on the other hand, rejected a large number of recent sector deals as “consolidation plays” that “don’t create real value for investors.” He went on to say, “frankly, we’re not interested in buying volume,” highlighting Exxon’s preference for performance over reserves.
The comments follow an arbitration loss to Chevron over control of Hess’s 30% stake in the Exxon-led Guyana oil project, one of the most promising discoveries in recent history. Chevron’s deal, initially struck in 2022, had been held up amid a dispute with Exxon, but was recently cleared—removing a significant overhang from Chevron’s strategic outlook. Both companies released disappointing second-quarter earnings Friday, weighed down by lower crude prices and increased global supply.
Chevron’s chemical business is doing well, and it is also gaining from new production in the Gulf of Mexico and Kazakhstan. Analysts anticipate that Chevron’s valuation will start to catch up to Exxon’s now that the Hess deal is no longer in limbo.
Politics and policy
Exxon remains committed to lowering its emissions footprint, especially in the Permian Basin, despite regulatory uncertainty in the United States.”We’re very aggressively pursuing management of those emissions,” Woods said. “That doesn’t change with the political party in office.”
His remarks come after the Trump administration recently rolled back regulations pertaining to climate change. In a move that might erode future emissions controls, the Environmental Protection Agency announced plans this week to overturn a significant scientific finding on greenhouse gases. Investors continue to focus on balance sheet strength, capital discipline, and strategic execution despite a changing geopolitical and environmental landscape as both oil majors recalibrate in a volatile market.
Featured Image Credit: Jan Zakelj; Pexels: Thank You!
