ConocoPhillips is to buy the independent US natural gas producer Burlington Resources for just under 30 billion euros in cash and stock. The acquisition comes at a time when gas is near record high prices. ConocoPhillips used up more of its reserves last year than it replaced through exploration and the company said this was an opportunity to gain access to Burlington’s wide ranging assets in continental US and Canada.
With this purchase ConocoPhillips is still the third largest US energy producer, with estimated turnover this year of 162 billion euros, but it is now closing in on its nearest rival, Chevron. In world terms, the newly merged company will be the fifth biggest. Annual savings of over 300 million euros are being predicted through shared operating and exploration costs. Some job losses are anticipated.
ConocoPhillips’ chairman and chief executive Jim Mulva is following a policy of growing the firm by acquisitions. Last year, Conoco bought a 7.6% per cent stake in Russia’s Lukoil. Analysts say with energy companies cash rich from high oil and gas prices more mergers can be expected.