The U.K.’s Sunday Times reported on September 10th for the second time in a year that Chevron Corp. and Phillips Petroleum Co. are close to announcing a merger between the two companies.
Chevron, a leading U.S. oil major, and U.S. independent Phillips, declined to substantiate the newspaper report.
If Chevron were to buy Phillips, it would be the latest in a number of significant takeovers in the oil industry in the last two years, including BP Amoco’s purchase of Atlantic Richfield Co. (Arco) and Exxon Corp.'s blockbuster purchase of Mobil Corp.
According to the U.K. newspaper, the two U.S. oil companies will make a decision on the merits of the merger by the end of the year. It also said the combination would be worth about $78 billion.
The report comes almost exactly a year after the Sunday Times issued a similar story in which it said Chevron was negotiating to buy Phillips for about $16.2 billion. Although the firms never confirmed that they were holding takeover talks, they did subsequently enter into a downstream joint venture earlier this year, called Chevron Phillips Chemical Co., which holds more than $6 billion in assets.
Phillips has downplayed interest in a merger, instead focusing on joint ventures to shore-up its less profitable businesses and concentrating on its exploration and production operations, helped by record-high crude prices.
Phillips Chief Executive Officer Jim Mulva has said he wants to form a partnership for Phillips’ refining, marketing, and transportation assets.
If Chevron buys Phillips, it would be acquiring a company that just added 2.2 billion barrels of oil and natural gas to its reserve base through the purchase of Arco's Alaskan oil assets.
Speculation about Chevron's merger plans has been rampant since talks between it and Texaco Inc. broke down in June 1999. At the time, Texaco said the Chevron offer was “unacceptable in all respects.”
( oilnavigator )
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