Delegates meet at the Exxon Mobil booth during the LNG2023 conference, in Vancouver, B.C., Tuesday, July 11, 2023. THE CANADIAN PRESS/Darryl Dyck
CALGARY – Exxon Mobil Corp.’s acquisition of Pioneer Natural Resources in a US$59.5 billion mega-deal is being seen by some as a massive vote of confidence in fossil fuels that also bodes well for the Canadian oilpatch.
Dan Tsubouchi, principal and chief market strategist with SAF Group, says Exxon is clearly confident that global demand for oil will remain strong in the immediate future.
He says while the energy transition will mean declining demand for oil in the long-term, Exxon likely believes it has at least a 15-year window before that effect is significant.
Tsubouchi says Exxon’s bullish view on fossil fuels is shared by many in the Canadian oilpatch, adding he wouldn’t be surprised to see an uptick in merger and acquisition activity here – particularly among producers using hydraulic fracturing (fracking) in the Montney region of northeast B.C. and northwest Alberta.
Exxon’s blockbuster deal announced Wednesday is the U.S. super-major’s largest buyout since acquiring Mobil two decades ago, and will create a colossal fracking operator in West Texas.
Once the deal closes, Exxon’s production volume from the Permian basin oilfield is expected to more than double to 1.3 million barrels of oil equivalent per day, based on 2023 volumes.
This report by The Canadian Press was first publishedOct. 11, 2023.
– With files from The Associated Press
