Chevron’s acquisition of Noble Energy launched an ongoing M&A frenzy in the U.S. shale patch as companies look to consolidate to cut costs while adding immediately cash-flow-positive resources to their portfolios. For Chevron, the US$5-billion all-stock deal to take over Noble Energy was not only about adding acreage in the DJ and Permian basins.
Through the transaction, the U.S. supermajor is gaining more exposure to natural gas assets in the Eastern Mediterranean, including a large stake in Israel’s biggest gas field, which started production in December 2019.
The already producing Leviathan gas field, the biggest energy project in Israel ever, is diversifying Chevron’s portfolio with more natural gas resources and a position in the eastern Mediterranean very close to the Middle East and European gas markets.
The timing of the U.S. supermajor’s bet on natural gas in the Eastern Mediterranean coincides with expectations that gas will play a major role in supporting the growing share of renewables in Europe amid the European Union’s (EU) push to bet heavily on renewable energy sources to reach carbon neutrality by 2050 under the European Green Deal.
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Source: Oil Price