Anadarko and Chevron have a 75-mile stretch of contiguous acreage in the Permian, which should help the companies reduce production and transportation costs. About a third of total US oil production comes from the basin, which is largely responsible for the production and export boom of recent years.
“This is a compelling transaction,” Chevron’s chief executive, Michael K. Wirth, told analysts. “We intend to accelerate activity in Anadarko’s Permian acreage.”
Chevron, which is based in San Ramon, California, is the world’s 10th largest company producing oil and gas, and Texas-based Anadarko ranks 41st, according to Rystad Energy, a consulting firm. Once the merger is completed by the end of the year, Chevron will climb to 7th place, vaulting ahead of Royal Dutch Shell and BP.
Chevron’s move is the third major acquisition in the Permian over the last three years and there have been many smaller ones.