Assets in the Permian Basin are the US oil industry’s equivalent of the Iron Throne in the TV show Game of Thrones: they are the prize that everyone covets. Occidental Petroleum, already the largest holder of drilling rights in the Permian region, on Wednesday made its play to expand its territory, launching a hostile $55bn bid for Anadarko Petroleum, in an attempt to break up the agreed $5obn takeover by Chevron that it had announced on April 12. The contest is likely to be won by the side that is the most effective in convincing shareholders that it would be the best owner of Anadarko’s Permian assets.
For Vicki Hollub, Occidental’s chief executive, the bid was a characteristically bold move, and a challenging one. She has to make the case for the deal not only to Anadarko’s investors, but also to her own. Under the terms of its offer, which is 50/50 cash and shares, Anadarko ‘s shareholders would end up with about 29 per cent of the combined company, and a deal that size requires investor approval.The ambition of the bid, which would make Occidental the third largest US oil production company, fits with Ms Hollub’s reputation, according to Robin West, managing director of the Center for Energy Impact at the Boston Consulting Group.
One of very few women holding senior roles in the industry, she has also stood out with her support for action to address the threat of climate change, setting set a goal for the company ultimately to cut its net carbon emissions to zero”She thinks big about climate change and the company’s licence to operate,” Mr West said. “And she also thinks big about her strategy for the company. Initially, analysts’ and investors’ reactions to her interest in Anadarko indicated they thought her ambition had gone too far.