On Monday, Chevron Corp. (NYSE: CVX) announced an acquisition agreement for Noble Energy (NASDAQ: NBL) at $5 billion. This marks the largest energy deal since the onset of the COVID-19 pandemic, which has devastated the oil and gas industries due to a decline in industrial oil prices and decreased consumer demand.
Commenting on the benefits of the deal, Chevron CEO Michael Wirth said, “This is a cost-effective opportunity for Chevron to acquire additional proved reserves and resources. Noble Energy’s multi-asset, high-quality portfolio will enhance geographic diversity, increase capital flexibility, and improve our ability to generate strong cash flow.”
The deal will increase Chevron’s oil and gas reserves by 18% with assets in the U.S. and abroad, including reserves in Israel and West Africa. Overall, the inclusion of Noble Energy’s portfolio will increase the company’s global presence.
Chevron is poised to be one of the first behemoth energy producers to gain large-scale access to Israeli resources, undoubtedly increasing the company’s influence in the Eastern Mediterranean. That said, Chevron’s ownership of Israeli assets raises diplomatic questions since the company has a history of doing business with other big players in the region, including the UAE and Saudi Arabia, both vociferous opponents of Israel.