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BUSINESS: ChevronTexaco to Buy Unocal for $16.4 Billion

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posted on Apr, 4 2005 @ 09:54 AM
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ChevronTexaco, the second largest U.S. petroleum corporation, annouced plans to buy rival Unocal for $16.4 billion in cash and stock. The move further consolidates the U.S. oil industry after other high-profile mergers such as Exxon and Mobil and occurs in a climate of sharply rising oil and gas prices. The merger is expected to be complete by the end of the year pending regulatory approval.
 



abcnews.go.com
NEW YORK Apr 4, 2005 — ChevronTexaco Corp., the nation's second biggest oil concern, is buying rival Unocal Corp., the ninth biggest U.S. oil and gas exploration and production company, for about $16.4 billion in cash and stock. Shares of both companies fell, with Unocal tumbling more than 6 percent.

Under the deal announced Monday, ChevronTexaco would also assume $1.6 billion of debt in the deal.

Unocal has been evaluating a possible sale and reportedly had also drawn interest from the Italian oil company Eni SpA and China National Offshore Oil Corp., a large Chinese state-owned company.

The deal would be the largest takeover in the oil sector in years, and comes as crude oil futures prices have been hitting record levels albeit they are still lower than the peaks reached in the 1980s in inflation-adjusted terms.


Please visit the link provided for the complete story.


Consolidation in the oil industry continues, as it is in other industries. Hopefully, it will not hurt the consumer -- with globalization and competition from foreign producers such as BP and Shell, I still think we're far from going back to a Standard Oil type monopoly in the industry.




posted on Apr, 4 2005 @ 10:18 AM
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'not hurt the consumer'

Shoot- anytime one of the 'seven sisters' does something the consumer suffers. Look for statements regarding holding prices down and the like. Then, not far into the future escalation will sneak back in.

Chevron is one of the public remains of the original megalopoly- Standard Oil.



posted on Apr, 4 2005 @ 06:13 PM
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I also feel when ever there is a big merger that in the end it will make things worse for the consumer. I know people could argue both sides, and it might be unforchant that I feel that way, but that is what I think. Not good that I do perhaps but o well



posted on Apr, 4 2005 @ 06:51 PM
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Originally posted by Red Golem
I also feel when ever there is a big merger that in the end it will make things worse for the consumer. I know people could argue both sides, and it might be unforchant that I feel that way, but that is what I think. Not good that I do perhaps but o well


This is true. I agree. The more companies out there competing with one another the more likely prices will remain low. Once you have a company that buys everything up it can then charge what it wants because it has no competition and the demand will go up. Its a smart move by the oil companies. Thats going to be one heck of a powerhouse comapany.



posted on Apr, 4 2005 @ 07:10 PM
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I think it's interesting that this announcement comes on the heels of Chevron's announcement that they will be investing a signifigant sum in the continuing development of Venezuela's oil fields, pumping super-heavy crude, building pipelines to transport it to refineries in the northern regions for distillation and separation, and then building more pipelines to transport the lighter crude to other destinations, likely in the states.

I wonder what all this activity signals. I see signs, but have been unable so far to make any meaningful decisions as to what the signs mean.

I know I wouldn't be building any infrastructure in Venezuela right now, they're just as likely to nationalize it and cut you out of the deal as let you stay.
It seems like intentonally bad business, and I'm really curious as to the motivations of all involved.



posted on Apr, 4 2005 @ 10:05 PM
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well wyrde having one of the major oil companies go down due to nationalization of billions worth of new construction would be a huge hit to our economy. But throw in a newly merged company it could be a fatal hit so let's hope they know what they are doing.



posted on Apr, 5 2005 @ 08:41 AM
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ChevronTexaco is a major funding contribuiter to The Pacific Research Institute (PRI). The PRI says "The Kyoto Protocol is wrong on all accounts. There is no conclusive scientific evidence that global warming exists or that, if it does, human activity is a contributing factor. But in the event warming is occurring and is stoppable, the Protocol will not even come close to achieving its stated goal. The world's largest emitters will get a free ride, leaving the United States to bear the burden."

The Worlds largest contributers they are talking about is China and India. I guess since they are getting a free ride, ChevronTexaco decided they needed to buy out Unocal in order to capitalize in that region.

ChevronTexaco is also a major funding contributer to The Global Climate Coalition (GCC).
The GCC says that Global warming is a plot to enslave the world under a United Nations-led "world government." I guess since ChevronTexaco wants to be the major oil supplier to China and India so they can take advantage of the fact that the two countries are not obligated by Kyoto to reduce green house gases.



posted on Apr, 5 2005 @ 06:04 PM
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I don't doubt global warming exists, but I do doubt the effectiveness of putting practically unreachable targets in place, along with penalties for falling short. That's what Kyoto was all about. I think they had the right idea, they went about it the wrong way.

I wasn't the least bit upset when I read about Kyoto not being ratified. But that's another story.

And yeah, Sugarlump, a hit that big would hurt, for sure. But then again, all it would take would be the compassion of one or two super rich Americans to pull us back up. Say..Cheney and Heinz. They could team up to help us weather the storm. What a team they'd be too.


Seriously, if this country falls off the precipice that we've been steadily slipping down, expect the corporate rats to bail and set up shop elsewhere. They have no loyalty, no compassion. We're on our own.



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