{"id":53412,"date":"2020-05-21T19:16:39","date_gmt":"2020-05-22T00:16:39","guid":{"rendered":"https:\/\/olduvai.ca\/?p=53412"},"modified":"2020-05-21T19:16:43","modified_gmt":"2020-05-22T00:16:43","slug":"covid-crisis-could-unify-worlds-largest-oil-companies","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=53412","title":{"rendered":"COVID Crisis Could Unify World\u2019s Largest Oil Companies"},"content":{"rendered":"\n

COVID Crisis Could Unify World\u2019s Largest Oil Companies<\/a><\/h3>\n\n\n\n

Sir Winston Churchill once admonished leaders to never let a good crisis go to waste. Wall Street banks and other large banks have been paying attention: They were shrewd enough to seize the opportunity presented by the last financial crisis to get hard-nosed government agencies to approve giant M&A deals they would otherwise have frowned upon.<\/p>\n\n\n\n

The oil sector should take its cue from the banking sector and try out a little Churchillian wisdom. <\/p>\n\n\n\n

Rob Cox, global correspondent for Reuters Breakingviews, seems to feel that is inevitable. He has told Reuters <\/a>that the Covid-19 crisis could lead to merger mania in sectors like telecoms, auto, consumer goods, and energy.<\/p>\n\n\n\n

But unlike the mid-cap energy mergers that had begun to break out before the crisis struck, Rob says tie-ups between giant producers like ExxonMobil (NYSE:XOM), Chevron <\/strong>(NYSE:CVX) and BP<\/strong>(NYSE:BP) among others is now within the realm of possibility.<\/p>\n\n\n\n

Cutting Costs<\/strong><\/p>\n\n\n\n

Pre-crisis notions about competition and antitrust concerns, Cox argues for Reuters, might take a backseat as economies emerge from lockdowns with governments changing tack and beginning to prioritize building industries with better operational efficiencies, lower costs, and healthier balance sheets. <\/p>\n\n\n\n

Giant energy companies could use the cost-cutting gambit to justify mammoth deals that would otherwise fail to pass muster.<\/p>\n\n\n\n

Under this backdrop, Exxon and Chevron might bandy together, and even throw in BP for good measure, to form the acronymous \u201cExChevBrit\u201d whose combined market cap of $425 billion and reserve pool of ~70 billion barrels of oil equivalent would still pale in comparison to Saudi Aramco\u2019s $1.6 trillion value and 270 billion Boe.<\/p>\n\n\n\n

The financial crisis of 2008 that crippled the global banking sector, Cox notes, opened the way for mega-mergers such as\u00a0Bank of America<\/strong>\u00a0paying $50 billion for Merrill Lynch<\/a>;\u00a0Wells Fargo<\/strong>\u00a0ponying up\u00a0$15.1B to snag West Coast rival Wachovia<\/a>\u00a0and high-street lender\u00a0Lloyds TBS<\/strong>\u00a0coughing up \u00a312bn for HBOS.<\/a><\/p>\n\n\n\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

COVID Crisis Could Unify World\u2019s Largest Oil Companies Sir Winston Churchill once admonished leaders to never let a good crisis go to waste. Wall Street banks and other large banks have been paying attention: They were shrewd enough to seize the opportunity presented by the last financial crisis to get hard-nosed government agencies to approve […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[23185,21892,2489,5332,683,855],"class_list":["post-53412","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-alex-kimani","tag-mergers-and-acquisitions","tag-oil-companies","tag-oilprice-com","tag-reuters","tag-viral-pandemic"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=53412"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53412\/revisions"}],"predecessor-version":[{"id":53413,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/53412\/revisions\/53413"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=53412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=53412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=53412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}