Oil company mergers

As energy prices rise oil companies are trying to find ways to get more oil on the market. Several offer companies in the past few years have merged included ExxonMobil, ChevronTexaco (now known as Chevron), and ConocoPhillips.

As a petroleum engineer I have mixed views on mergers. Buying other companies with proven reserves is actually cheaper than developing new reserves. Even though Anadarko paid a premium price for the two oil companies the production of the reserves will more than make up for the cost. As with any consolidation some employees get cut or repositioned. One of the reasons I actually chose to work with Chevron this summer was to get exposed to a larger petroleum corporation that I feel will not get bought out.

After the last oil recession in the 1990's the oil companies fell behind over seas state owned oil companies. The mergers help keep the oil companies on a competitive level with these governments. I believe now we will not see as many large oil mergers due to the high prices of oil. In the future though we will see some smaller oil acquisitions by the major oil companies.

Before today I always feared Anadarko could have possibly been bought out by another petroleum company. This article has changed my mindset about the future of Anadarko and I am proud to know several Anadarko engineers who graduated from our college.