Permian Basin

Chevron agreed to pay $33 billion for Anadarko Petroleum on Friday, broadening its access to the largest oil region in the continental U.S. as President Trump pushes the country to produce enough fuel to meet its own energy needs.

The deal, which offers Anadarko investors $65 a share in cash and stock, expands Chevron’s oil production in the Permian Basin, the oil-rich swath of land in western Texas and southeastern New Mexico that’s 250 miles wide and about 300 miles long, as well as deepwater drilling in the Gulf of Mexico.

“We intend to accelerate activity in Anadarko’s Permian acreage,” Chevron CEO Michael Wirth, who hopes to complete the deal by the end of this year, told investors on Friday. “Getting more out of the Permian sooner is an important value driver.”

For the San Ramon, Calif.-based company, which already controlled 2.2 million acres in the region and is adding 589,000 with the transaction, the driver isn’t “getting bigger in the Permian, it’s about getting better,” Wirth said. That includes the the area’s Delaware Basin, where Anadarko has operations.

Late last year, the U.S. Geological Survey identified an estimated 46 billion barrels of oil in two formations in the Delaware Basin, a development that left then-Interior Secretary Ryan Zinke confident “that American energy dominance is within our grasp.”

The U.S. is the world’s largest oil producer, outpacing both Russia and Saudi Arabia, thanks largely to technological advances that let producers extract oil from shale formations.

Achieving energy independence was one of Trump’s signature campaign promises in 2016, a commitment based on concern that U.S. reliance on oil imports left the country more vulnerable and cost American jobs.

“We’re ending the theft of American prosperity and rebuilding our beloved country,” Trump said when he signed an executive order prompting energy independence just two months after taking office. “We will unlock job-producing natural gas, oil and shale energy.”

Anadarko climbed 33 percent to $62.20 after the sale was announced Friday. Chevron, which has a market value of $232.9 billion, has climbed 10 percent this year to $119.76.


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