Chevron to buy energy firm Hess for $84 billion

The news: Energy giant Chevron has agreed to buy smaller rival Hess Corporation, marking the second blockbuster oil and gas tie-up in the US this month.

The numbers: Chevron will pay about USD171 per share, or USD53 billion ($83.7 billion), to secure Hess in an all-stock deal. The offer represents a 4.9% premium to Hess' closing price on Friday. Chevron shares closed 3.7% lower, while Hess shares fell 1%.

The context: The deal gives Chevron a 30% stake in the Exxon and CNOOC-backed Stabroek oil block in Guyana, which is expected to triple output to more than 1.2 million bpd by 2027. It will also pick up additional US shale assets in North Dakota, bulking up the shale holdings of the second biggest US oil and gas producer. The deal comes just weeks after top producer ExxonMobil agreed to buy shale driller Pioneer in a $US59.5 billion deal. The deals will add years of oil and gas production to the top US fossil fuel producers, even as European rivals have turned their attention to renewable fuels.