Exxon agreed to buy its rival Pioneer for $60 billion

ExxonMobil has agreed to buy U.S. rival Pioneer Natural Resources in a $59.5 billion all-stock deal that will make Exxon the largest oil producer in the largest U.S. field and ensure decades of low production costs.

Completion of the deal is expected in early 2024 and will allow the four largest US oil companies to control most of the Permian Basin shale field and its infrastructure.

This is the largest deal for Exxon since the purchase of Mobil oil for $81 billion in 1998, a few years before the development of shale fields.

According to analysts, Pioneer is the largest operator in the Permian Basin, with a share of 9% of gross production, while Exxon is in 5th place with a share of 6%.

The merger will create a diversified energy company with the largest acreage of high-return wells in the Perm Basin.

Permian oil is highly valued in the US energy industry due to its low production cost. Minimum production costs average $10.5/barrel.