Chevron Corporation said on Monday it would buy oil and gas producer Noble Energy for about $5 billion in stock, the first big energy deal since the coronavirus crisis crushed global fuel demand and sent crude prices to historic lows.
The deal makes Chevron the first major oil company to enter Israel. Chief Executive Officer Mike Wirth told Reuters: "We certainly are mindful of the fact that there are political differences and tensions" between Israel and neighbors where Chevron also has business, including Saudi Arabia, Kuwait, Qatar, and the Kurdish region of Iraq.
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He said Chevron was "apolitical" and "a commercial actor" in the region. "We engage with all of our different stakeholders as we go through something like this," Wirth said, declining to detail the timing of discussions with partner governments.
Israeli Energy Minister Yuval Steinitz called the deal "a tremendous expression of confidence in the Israeli energy market."
The Israeli assets "will rebalance the portfolio towards gas and provide a springboard" in the region, said Tom Ellacott, senior vice president at Wood Mackenzie.
The purchase boosts Chevron's investments in US oil shale and gives it Noble's flagship Leviathan field off the shore of Israel, the largest natural gas field in the eastern Mediterranean.
Oil companies are under pressure to reduce their carbon footprint. Gas is seen as a cleaner-burning fuel.
The oil price crash has decimated shares of many energy companies, making them attractive targets for those that have weathered the downturn and have the resources to buy. Chevron ended the first quarter with a cash pile of $8.5 billion after withdrawing a $33 billion bid for Anadarko last year and then being among the first big oil companies to slash spending during the downturn.
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