Fight for oil in the US

Published on: 09-May-2019
Category: Trading
Last updated: 09-May-2019

Fight for oil in the US

In the Permian basin in Texas is the second largest oil and gas deposits in the world and has been heavily contested by the American oil giants since its discovery. Last year in November, it was announced that there are still oil reserves in the area stretching from western Texas to eastern New Mexico. One hundred years ago, the first oil was discovered there, but the quantities produced have been declining for 40 years. But as new methods for oil extraction have been developed in recent years, the well-known deposits are again interesting for the oil companies. The special thing about the Texan Perm Basin is that oil and gas are stored in several layers with each other and so you can promote more quantities of raw materials so quickly.

Since the interest of large corporations has long been declining in the area, usually small mining companies have the drilling rights. But now oil giants like Exxon and Chevron are back with billions of investments and want to secure the raw materials of the Permian Basin. The oil promises a profit in spite of falling oil prices and the climate discussions and is seen not so critical especially in the USA, as for example in Europe. The shareholders from Europe expect companies to invest in sustainability and green energy. How that is taken up in the US, remains to be seen.

Meanwhile, US oil companies are outbidding smaller companies to secure the region's raw materials. Chevron has a $ 33 billion bid on Anadarko Petroleum and about $ 15 billion in debt. But the competitor Occidental Petroleum is interested in the purchase of Anadarko Petroleum and offers $ 38 billion. Behind the group is also the star investor Warren Buffett, who wants to participate with several billion dollars in the acquisition by Occidental Petroleum. The Anadarko shares rose by ten percent to over $ 70, according to offers.



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