Both deals made it abundantly clear: For all the push towards renewable energy, the disapproving looks environmentalists give to non-electric cars and threats by bankers to withhold financing for exploration and drilling, oil remains a crucial fuel without which entire economies would grind to a juddering halt.
Demand for commodities from fossil fuels to precious metals and grains and livestock is not going away anytime soon as recent big acquisitions have shown. How can investors position themselves for the ride?
Big oil has always been associated with big money. In what was the second-largest mega deal of the oil industry in a fortnight, Chevron Corp on Oct 23 announced the acquisition of Hess Corp for US$53 billion ($72.34 billion), which holds a 30% own ership of more than 11 billion barrels of recoverable resources in Guyana in South America, seen as one of the world’s newest major oil producers. Less than a fortnight earlier, ExxonMobil announced it was paying US$58 billion for Pioneer Natural Resources, a front-runner in the US shale oil industry.
