$60 billion was the price that Exxon-Mobil paid Pioneer to acquire about 1.3 million barrels per day of equivalent oil and gas to increase its throughput to two million barrels by 2027 or to own 16 billion barrels of equivalent oil and gas. It is the mother of all oil deals at a time when the International Energy Agency asserted that global demand for fossil fuels will peak before 2030. This demand must fall in order to avoid the worst impact on global warming and in accordance with the Paris Agreement.

The biggest major oil company is firm on its assumption that oil and gas will remain with us and that by 2050, oil and gas will still meet more than half of the global energy demand due to the growth of population and the slow transition into greener forms of energy, and that it will stay longer than what others anticipate. Furthermore, according to recent reports, the world is likely to fail to keep the global temperature rise below two degrees Celsius above preindustrial levels, which is the target set by the Paris Agreement. ExxonMobil is set to make a profit on its acquisition from last Wednesday, the day it signed and acquired Pioneer, as it will make money at any oil level above $34 a barrel. The current average price of West Texas crude oil is in the range of $83 or a net profit of $49 per barrel.

At the same time, it is putting the USA back on the energy map by becoming the largest oil driller and maintaining its grip on the gas supply to Europe, thereby avoiding the Russian threats of disruption to supply. It will be the biggest oil producer in the world by 2027 with about 15 million barrels of oil production per day, with ExxonMobil contributing more than two million barrels. ExxonMobil is adamant that shale oil will remain for a long time beyond the year 2050. The payment of $60 billion is proof, backed up by its board members and its shareholders. The rest of the story will be told in the coming years.

Meanwhile, Pioneer shareholders are happy to receive 2.32 shares of ExxonMobil for each share of Pioneer. It looks like the major international oil company has established itself to remain in the oil and gas sector for many years to come, certainly beyond 2050. OPEC+ should be happy too! email:

By Kamel Al-Harami
Independent Oil Analyst

[email protected]