In a strategic move aligning with the ongoing consolidation trend in the U.S. oil sector, Occidental Petroleum has unveiled its intention to acquire CrownRock, a private oil producer, for a substantial $12 billion. This bold proposal follows recent acquisition announcements by Exxon Mobil and Chevron, the titans of the American oil landscape.

Occidental, headquartered in Houston and already a major player in the Permian Basin, the nation’s most prolific oil field spanning Texas and New Mexico, aims to augment its portfolio with CrownRock’s 94,000 acres of untapped shale fields, promising substantial oil and gas resources. Occidental’s Chief Executive, Vicki Hollub, asserted that the acquisition could result in a remarkable 14 percent surge in the company’s daily oil and gas production.

The Permian Basin, once in a state of decline, witnessed a revival due to technological advancements such as horizontal drilling and fracking through shale rock. Private entities like CrownRock, led by Texas billionaire Timothy Dunn and backed by Lime Rock Partners, filled the void left by major oil companies that had previously downsized their presence in the region.

Environmental concerns have surfaced in light of the industry’s consolidation, with fears that increased fossil fuel production could hinder climate policy initiatives. Cassidy DiPaola, spokesman for Fossil Free Media, expressed apprehension, stating, “As oil companies consolidate power, it will become even harder to advance climate policies and hold the industry accountable for its role in the climate emergency.”

Occidental, cognizant of climate change challenges, has attempted to pivot towards cleaner fuels. The company has invested in carbon capture technology, aiming to extract carbon dioxide from the atmosphere and utilize it for enhanced oil recovery and the production of materials like concrete.

This move by Occidental comes against the backdrop of its prior endeavor to expand in shale fields, exemplified by the 2019 acquisition of Anadarko for $38 billion. Although this move faced challenges amid plummeting oil prices, especially during the pandemic, Occidental has rebounded strongly from the setbacks.

The consolidation wave in the industry is evident in Exxon Mobil’s $60 billion acquisition of Pioneer Natural Resources and Chevron’s $53 billion deal with Hess, both slated for completion next year. Occidental’s confidence in the face of a 20 percent decline in oil prices since late September is underscored by the company’s decision to raise its dividend from 18 cents to 22 cents a share.

As Occidental Petroleum ventures into this high-stakes acquisition, the industry watches with keen interest, anticipating the impact on the evolving landscape of U.S. oil and gas production.