Energy giant Royal Dutch Shell sold its oil and gas business in the Permian Basin, the country's largest oilfield, to ConocoPhillips for $9.5 billion cash on Monday.
The deal is a major move for Shell, which produces more than 175,000 barrels of oil per day in the Permian Basin, as it faces pressure to reduce its oil and gas production and produce more clean energy in response to concerns from investors and the public about climate change.
For Houston-based ConocoPhillips, Monday's announcement furthers the company's investment in the Permian Basin. Last year, the company bought large oil driller Concho Resources for $9.7 billion.
Acquiring Shell's land makes ConocoPhillips a top Permian producer alongside Chevron, Exxon Mobil and Pioneer Natural Resources, which bought DoublePoint Energy for $6.4 billion earlier this year.
"The Permian Basin is not going anywhere," Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, said in an interview Monday. "And that's going to continue to be the most prolific and highest [oil] producing region in the country."
But Shell and other major energy companies have faced growing scrutiny for their role in climate change and their public messaging about how fossil fuels contribute to it.
Last week, the U.S. House Oversight Committee widened its inquiry into what it characterized as the oil and gas industry's "longrunning, industry-wide campaign to spread disinformation about the role of fossil fuels in causing global warming." The committee called on top executives from Shell, BP, Chevron and Exxon Mobil to testify before Congress next month.
Ryan Lance, ConocoPhillips chair and chief executive, called the Shell deal a "unique opportunity" in a news release announcing the acquisition. Lance also said "we are very excited to enhance our position in one of the best basins in the world with the addition of Shell's high-quality assets and talented workforce."
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