The executives of the American oil companies ExxonMobil and Chevron held preliminary talks in early 2020 to explore the combination of the two largest US oil producers in what would have been the largest merger of all time, according to people familiar with the issue.
The talks, which are no longer ongoing, are seen as testing the waters for the corporation’s huge marriage after the coronavirus pandemic shook the world last year, the Wall Street Journal reported on Sunday.
Such discussions are consequently indicative of the pressure faced by the most dominant companies in the energy sector, as Covid-19 has grown and oil prices have fallen.
Discussions between Exxon CEO Darren Woods and Chevron CEO Mike Wirth have been serious enough for legal documents involving certain aspects of the merger talks to be drafted, one source told Reuters.
Sources requested anonymity because the matter is confidential. Exxon and Chevron, which have market capitalizations of $ 190 billion and $ 164 billion, respectively, declined to comment on Sunday.
Discussions have been described as preliminary and, although not ongoing, may return in the future.
Such an agreement would bring together the two largest descendants of John D Rockefeller’s Standard Oil monopoly, which was broken by US regulators in 1911 and reshaped the oil industry, the Journal reported.
The market value of a combined company could exceed $ 350 billion, creating the world’s second largest oil company by market capitalization and production, second only to Saudi Arabia’s state-owned oil producer Aramco.
Such a major US oil merger could face regulatory and antitrust hurdles in the new Biden, which has led the US back to the Paris climate agreements.
Last week, Biden signed new environmental orders, saying the climate crisis is an existential threat that calls for urgent remedies and introduced his team, including former Secretary of State John Kerry, as the new US global envoy for climate change.
During the election campaign in October last year, Biden said he would push the United States to “transition away from the oil industry.”
One of the people familiar with the talks told the newspaper that the parties may have missed an opportunity to conclude the agreement under former President Donald Trump, who withdrew the Paris agreement and had a strong relationship with the fossil fuel industries.