Article today with my highlighting. ATS management have been...

Article today with my highlighting. ATS management have been saying for some time that reserve replacement would start becoming a pressing issue as fields decline and underinvestment continues. Quickest way to plug the hole is to acquire someone else's reserves.

Just weeks after ExxonMobil paid almost $US60 billion ($95 billion) for Pioneer Natural Resources, Chevron has announced it will pay $US53 billion ($84 billion) for Hess Corporation, which will give Chevron a 30 per cent stake in ownership of more than 11 billion barrels-equivalent of recoverable resources in Guyana, one of the world’s major new oil producers.As former Woodside Energy boss Peter Coleman told The Australian Financial Review Energy & Climate summit earlier this month, big energy is pivoting back towards fossil fuels – and hard.These acquisitions reflect the structural change underway in oil and gas. They are recognition that years of underinvestment in new supply – partly for ESG reasons, partly because fossil fuel demand will fall as the energy transition rolls out – have left the market short, and are likely to have put a higher floor under prices.The deals suggest Exxon and Chevron see decades of strong demand, meaning there is a window where owning good-quality oil and gas assets will be very, very lucrative for players with scale