Latest news with #Chevron
Fibre2Fashion
4 hours ago
- Business
- Fibre2Fashion
Chevron finalises Hess deal, adds Guyana & Bakken assets
Chevron Corporation (NYSE: CVX) announced that it has completed its acquisition of Hess Corporation (NYSE: HES) following the satisfaction of all necessary closing conditions, including a favorable arbitration outcome regarding Hess' offshore Guyana asset. The combined company has one of the most advantaged and differentiated portfolios in the industry, with leading positions in critical energy markets around the world and a high cash margin production profile. In addition, on July 17, 2025, the Federal Trade Commission (FTC) lifted its earlier restriction, clearing the way for John Hess to join Chevron's Board of Directors, subject to Board approval. 'This merger of two great American companies brings together the best in the industry,' said Chevron Chairman and CEO Mike Wirth. 'The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders. Additionally, I'm pleased with the FTC's unanimous decision. John is a respected industry leader, and our Board would benefit from his experience, relationships and expertise.' 'We are proud of everyone at Hess for building one of the industry's best growth portfolios including Guyana, the world's largest oil discovery in the last 10 years, and the Bakken shale, where we are a leading oil and gas producer,' former Hess Corporation CEO John Hess said. 'The strategic combination of Chevron and Hess creates a premier energy company positioned for the future.' The acquisition adds world class assets, including Guyana and U.S. Bakken, to Chevron's diversified global portfolio where it is a leader in the Permian Basin, Gulf of America, DJ Basin, Kazakhstan, Eastern Mediterranean and Australia. Chevron now owns a 30% position in the Guyana Stabroek Block, which has more than 11 billion barrels of oil equivalent discovered recoverable resource; 463 thousand net acres of high-quality inventory in the Bakken; complementary assets in the Gulf of America with 31 thousand barrels of oil equivalent per day; and natural gas assets in Southeast Asia with 57 thousand barrels of oil equivalent per day. 'This accretive transaction is expected to drive significant free cash flow and production growth into the 2030s,' added Chief Financial Officer Eimear Bonner. 'We are quickly integrating our two companies and expect to achieve $1 billion in annual run-rate cost synergies by the end of 2025. All of this should enable even higher returns to shareholders over the long-term.' Under the terms of the merger agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. As a result, Chevron intends to issue approximately 301 million shares of common stock out of treasury to Hess stockholders in connection with the transaction. The 15.38 million shares of Hess common stock (which were acquired in open market transactions) beneficially owned by Chevron immediately prior to the closing were cancelled for no consideration. Chevron expects to achieve the following transaction benefits: Accretive to cash flow per share and extends growth into 2030s Expected to be accretive to cash flow per share in 2025 after achieving synergies and start-up of the fourth floating production storage and offloading vessel in Guyana. Increases Chevron's estimated five-year production and free cash flow growth rates and expected to extend such growth into the next decade. Capital and cost efficient The combined company's capital expenditures budget is expected to be between $19 and $22 billion. After closing, Chevron will target to sustain a double-digit Return on Capital Employed (ROCE) at mid-cycle prices. The transaction is expected to achieve run-rate cost synergies of $1 billion by the end of 2025. Chevron will provide updated long-term financial and operational information and guidance to reflect the acquisition of Hess at its Investor Day in New York City on November 12. Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged. Chevron has completed its acquisition of Hess Corporation, adding key assets in Guyana and the Bakken to its global portfolio. The deal enhances long-term growth and cash flow, with $1 billion in expected synergies by end-2025. John Hess may join Chevron's board following FTC clearance. Hess shareholders receive 1.025 Chevron shares per Hess share. ALCHEMPro News Desk (HU)
Yahoo
9 hours ago
- Business
- Yahoo
Global fusion energy investment surges to $2.64bn
Global fusion energy investment has seen a surge, with an influx of $2.64bn since July 2024 marking the largest annual increase since 2022, as reported by Reuters citing a report by Fusion Industry Association. The financial influx was noted across key regions such as the US, the European Union (EU), Japan, China and the UK. The Fusion Industry Association, based in Washington, US, reported that total funding for the 53 surveyed fusion companies now stands at close to $9.77bn - a five-fold increase since 2021. 2025's figures show a 178% jump from just over $900m raised in 2024. Companies within the sector emphasise the necessity for increased funding to transition fusion energy into a commercially viable industry. Significant challenges in achieving commercialisation involve reducing the energy requirements to initiate reactions, ensuring that these reactions can proceed in a continuous manner and developing efficient systems for energy transfer. FIA CEO Andrew Holland stated: 'The acceleration of capital, even when the global economy has tightened, is a signal of maturing investor confidence, technological progress and a rapidly coalescing supply chain.' Notably absent from these figures is public funding for state-led fusion projects, an area in which China is at the forefront globally. Investment has been drawn from conventional fossil fuel companies, including Chevron and Shell's venture arms, Siemens Energy and Nucor — the US's largest steel producer. This increase in financial backing coincides with rising power demands driven by AI applications and data centre growth. Google recently announced its agreement to purchase electricity from Commonwealth Fusion Systems' anticipated plant in Virginia that aims to begin operations by the early 2030s. Despite this positive trend in financing, securing additional funds remains challenging according to 83% of survey respondents. Fusion enterprises estimate they will need between $3m and $12.5bn more, with a median figure of $700m, to launch their first pilot plants successfully. The collective amount deemed necessary by industry players totals approximately $77bn — an eightfold leap compared to current investor commitments — and could be reduced through expected consolidation within the industry. "Global fusion energy investment surges to $2.64bn" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Free Malaysia Today
15 hours ago
- Business
- Free Malaysia Today
Embracing change: Petronas steps boldly into the future
PETRONAS has risen to new challenges such as environmental concerns and price fluctuations caused by armed conflicts on both the local and global fronts. (Reuters pic) PETALING JAYA : On June 5, 2025, national oil corporation Petroliam Nasional Bhd (Petronas) announced that it would focus on a company-wide transformation effort aimed at adapting to difficult market conditions. The move is part of the company's strategic shift towards what it calls 'Petronas 2.0', which will involve changes in structure, organisation, and work processes to pave the way for greater agility and success, empowering the company to thrive in an ever-evolving landscape. On the same day, the Brent crude opened at US$64.91 per barrel before reaching an intra-day high of US$65.86. Less than two years ago, in September 2023, the commodity was averaging US$93.72 per barrel. But that was not solely the reason for Petronas' decision to downsize — or 'rightsize' as it is referred to now. To understand why Petronas and other O&G players around the world are reviewing or restructuring their operations, FMT takes a look at the many new challenges that the industry has come to face. Global challenge Apart from Petronas, other oil companies such as Chevron and Shell are also reducing their respective workforce as part of a restructuring exercise. Early this year, Chevron announced a 20% cut in its workforce, a move that will see 9,000 employees leave the company by the end of 2026. Bloomberg reported that the job cuts were 'intended to streamline operations, reduce costs by US$2 billion to US$3 billion by 2026, and to improve efficiency'. Just a few months earlier, Shell announced that it would embark on a similar track that will see its workforce shrink 20% and cut costs also by US$2 billion to US$3 billion come end of 2025. The pain points The restructuring exercise, which includes job cuts, is unavoidable given the market volatility, coupled with environmental concerns, regulatory hurdles, and technological progress. Geopolitical events, including armed conflicts in the Middle East and Ukraine, have caused havoc in demand and supply, creating uncertainties and leading to a drop in prices. For instance, the Iran-Israel conflict has resulted in sharp swings in oil prices, with the Brent crude hitting a five-month high of US$81.40 a barrel after the US bombed nuclear sites in Iran, before dropping back to US$69 on news of a ceasefire. Margins have also begun to thin, not just as a result of falling prices but other factors as well. In mature fields, the sought-after product is often trapped in more complex geological formations, making extraction more complex and, therefore, costly. The cost of extracting a barrel of oil from older fields can be as high as US$50, making it unsustainable to keep these fields in production as market price comes down. Higher operating costs in mature fields are not the only reason that margins are thinning. Petronas is also heavily involved in deepwater projects. It already has fields in areas such as Gumusut-Kakap, Malikai, and Kikeh off the Sabah coast, and is developing new ones in Limbayong and the Kelidang Cluster, also off Sabah. Elsewhere, the national oil corporation has also expanded its involvement in deepwater projects in Suriname. Deepwater projects typically involve extraction from depths of 4,000 feet (1,219m) to 7,000 feet (2,134m) below sea level. The challenging conditions in deep and ultra-deep waters require specialised technology and infrastructure, pushing production costs higher. Petronas' active involvement in sour gas projects, particularly off the coast of Sarawak, presents another challenge. The high level of contaminants such as hydrogen sulfide and carbon dioxide makes it highly costly to process the gas. All these factors lead to higher operational costs, making it essential for the oil corporation to cut back in other areas to stay in business. The environmental factor The rising concern for Mother Nature is perhaps the biggest challenge for O&G companies. Oil, once the fuel that fired economic growth, is now regarded as the cause of all the ills of the environment. The cause of air and water pollution as well as deforestation that leads to global warming are attributable to the widespread use of fossil fuels. Oil producers around the world are being forced to make the transition to clean energy to meet more stringent green regulations. In Malaysia, Petronas is duty-bound to help the country migrate to clean energy under the National Energy Transition Roadmap (NETR). The NETR entails reducing the country's carbon footprint to take the economy on a more sustainable path. This involves investing billions of ringgit in renewables to secure the country's future energy needs. The need to reinvent It is time to stop looking at the O&G sector in general and Petronas in particular through rose-tinted glasses. Many oil companies, such as ExxonMobil, Shell, Chevron and TotalEnergies have all reported decline in profits since 2022. Petronas is no exception. Its profit has been on a steady decline, from RM101.6 billion in 2022 to RM80.7 billion in 2023 and then to RM55.1 billion in 2024. CEO Tengku Muhammad Taufik Tengku Aziz envisions a new path going forward and, among others, work processes will change. 'We will be more technologically driven, leveraging artificial intelligence (AI) and the digital ecosystem to unlock value and raise productivity,' he said. He pointed out that digital transformation could help businesses uncover new opportunities for value creation and productivity gains, while streamlining operations and reducing inefficiencies. 'AI-driven analytics enable data-driven decision-making, better risk management, and enhanced the ability to predict and respond to market shifts,' Tengku Muhammad Taufik said. 'This enables the organisation to remain agile, competitive, and well-positioned for the challenges of the evolving energy landscape,' he added. The rightsizing exercise will improve operational resilience and agility, where the workforce matches the company's strategic needs. Turning leaner and more cost-efficient will ensure that Petronas continues to pay dividends to the government to help Malaysia narrow its budget deficit and reduce reliance on broad-based subsidiaries. By trimming the non-essential roles, Petronas can also reinvest resources in sectors that are poised for growth, such as liquefied natural gas (LNG), downstream value chains including petrochemicals and lubricants, and low-carbon solutions like blue ammonia and carbon capture and storage (CCS). Looking ahead In the final analysis, the rightsizing exercise is unavoidable. In an environment of narrowing profit margins and a fast-shifting global energy market, strengthening the national oil company will bring long-term benefits for Malaysians. It must be pointed out that Petronas's financial position remains solid. Nonetheless, the rational thing to do is to act now, while the company is still profitable, rather than wait until painful steps such as pay cuts and retrenchment have to be taken. In addition, the company needs to streamline processes and reduce the number of layers to make it more agile. Rightsizing is the right thing to do.
Yahoo
18 hours ago
- Business
- Yahoo
Big Oil's Power Couple Heads to Guyana
Following the completion of Chevron's acquisition of Hess Corporation, the U.S. supermajor will need to overcome a previously strained relationship with its biggest competitor at home, ExxonMobil, and work together as joint venture partners in the hottest oil province in the world, Guyana's offshore oil treasure trove. Chevron's foray into the fastest-growing exploration and production spot globally could also be a sign of what's to come for the biggest international oil and gas majors. Big Oil may be looking to acquire smaller companies with prized assets to boost reserves amid lower spending on exploration within the industry over the past five years. For Chevron, the acquisition of Hess, whose completion was announced last week, means the supermajor is now gaining 30% in Guyana's Stabroek offshore block—where the operator ExxonMobil is leading the production of more than 660,000 barrels per day (bpd) from several projects in the block. Chevron's deal was finalized after a more than a year-long arbitration battle initiated by Exxon, which challenged the Chevron-Hess deal, claiming it had a right of first refusal for Hess's stake under the terms of a joint operating agreement (JOA) for the Stabroek block. Hess and Chevron claimed the JOA doesn't apply to a case of a proposed full corporate merger. The arbitration case has reportedly strained the relationship between the top executives of the two biggest U.S. oil firms. In the legal fight, Chevron had much more to lose than Exxon because Guyana's resources were the key reason for pursuing Hess Corp, more than the reason for adding producing assets in the Bakken shale basin in North Dakota. With the arbitration ruling in favor of Chevron, the company announced the completion of the Hess acquisition, 'following the satisfaction of all necessary closing conditions, including a favorable arbitration outcome regarding Hess' offshore Guyana asset.' 'The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders,' Chevron chairman and CEO Mike Wirth said in a statement. Chevron now owns a 30% position in the Guyana Stabroek Block, which has more than 11 billion barrels of oil equivalent discovered recoverable resource. Exxon is the operator of the Stabroek block with a 45% stake, and China's state firm CNOOC has the remaining 25% stake. The new shareholding composition of Guyana's prized oil asset means that Exxon and Chevron must put hard feelings aside and cooperate to boost their production and profits from the Stabroek block. The asset has a lot to offer, in terms of resources and money, to a company like Chevron, whose reserves replacement ratio has declined in recent years, and its oil and gas reserves have now reached the lowest level in at least a decade. During the past 10-year period, Chevron's reserves replacement ratio was 88%, it said at the Q4 earnings call in January. A ratio below 100% means that Chevron is depleting reserves faster than it can replace them. So far this year, Chevron has expanded production in Kazakhstan and started up production at the Ballymore oil project in the U.S. Gulf of Mexico. Guyana's offshore oil field is a top-performing asset with the potential to yield even more barrels and billions of U.S. dollars for the project's partners. Both Chevron and Exxon will benefit from Stabroek even at relatively lower oil prices, because the Guyana block is estimated to have a breakeven oil price of about $30 per barrel. Production capacity in Guyana is expected to surpass 1.7 million barrels per day, with gross production growing to 1.3 million barrels per day by 2030, Exxon says. Following the bitter arbitration dispute, Exxon and Chevron now must work together in Guyana, as they do in Kazakhstan and Australia, for example. 'Partnership is one of our core values, and we pride ourselves on being a good partner around the world with many, many different companies,' Chevron's Wirth told Bloomberg last week. 'We partner with Exxon on projects elsewhere in the world and have for many many years, and I'm sure we will find a way to move forward.' Exxon welcomed Chevron to the joint venture in Guyana, signaling that Big Oil will collaborate on multi-billion-dollar projects to maintain a high reserves replacement ratio, production, and profits. By Tsvetana Paraskova for More Top Reads From this article on
Yahoo
a day ago
- Business
- Yahoo
Block Is Joining the S&P 500 Index. Should You Buy XYZ Stock Now?
Block (XYZ) shares rallied as much as 8% on Monday following news the financial technology company will join the S&P 500 Index ($SPX) on July 23. Founded by Jack Dorsey in 2009, the New York Stock Exchange-listed firm will replace Hess in the benchmark index after Chevron (CVX) completed its $53 billion acquisition of the global independent energy firm on July 18. More News from Barchart It's Never 'Happened in the History of Tech to Any Company Before': OpenAI's Sam Altman Says ChatGPT is Growing at an Unprecedented Rate This Penny Stock Wants to Become the MicroStrategy of Dogecoin Option Volatility And Earnings Report For July 21 - 25 Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! Including today's gain, Block stock is up roughly 75% versus its year-to-date low set in early May. Significance of S&P 500 Inclusion for Block Stock Investors are cheering the announcement as index inclusion reinforces XYZ's status as one of the most influential U.S. companies. Joining the S&P 500 will boost both demand and liquidity for Block shares as funds, including ETFs, that track the benchmark index must now invest in them. According to experts, indexers may need to buy millions of XYZ shares, a powerful tailwind that could drive sustained momentum in the fintech stock. Simply put, becoming a part of the benchmark S&P 500 Index increases Block's visibility among institutional investors and validates its central role in reshaping digital finance. Baird Says XYZ Stock Has More Room to the Upside Index inclusion news made Baird analysts reiterate their 'Outperform' rating on XYZ shares as well. On Monday, the investment firm raised its price target on Block stock to $84, indicating potential upside of about 15% from its previous close. Analysts believe that Block stands to benefit from continued momentum in cryptocurrencies as well, given it currently has more than 8,500 Bitcoin (BTCUSD) on its balance sheet. Block has also built a robust ecosystem around crypto, including its Bitkey self-custody wallet and integration of the Lightning Network for faster, low-cost Bitcoin payments, which may help drive its share price up in the second half of 2025. Other Wall Street Firms Disagree with Baird on Block While index inclusion evidently is a majorly positive development for Block shares, other Wall Street analysts believe much of the related upside is already priced into XYZ stock. According to Barchart, the consensus rating on Block remains at 'Moderate Buy' but the mean target of about $68 indicates potential downside of more than 10% from current levels. On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
