HOUSTON — Hundreds of people will lose their jobs at Marathon Oil's Houston headquarters in the coming months after it merges with ConocoPhillips. The company expects to lay off more than 500 employees.
As we reported in May, ConocoPhillips announced it is buying Marathon Oil in a $22.5 billion deal as big oil companies reap massive profits.
The merger announced in May is expected to close by the end of the year.
Marathon said the layoffs will take place in the months after the deal closes but some employees will be retained for transition roles.
KHOU 11 energy analyst Ed Hirs said the impacted workers may have a tough time finding oil and gas jobs since there’s not a lot of expansion right now.
“Imagine that most of the employees that will be laid off are in the corporate side and executive officers – they’re skilled, they’re very talented, they can apply these skills in other industries and hopefully it won’t be a very difficult transition for them," Hirs said.
When the deal was announced, ConocoPhillips said the transaction would add highly desired acreage to its existing U.S. onshore portfolio.
“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading U.S. unconventional position,” ConocoPhillips Chairman and CEO Ryan Lance said in a statement in May.
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Oil majors put up record profits after Russia's invasion of Ukraine in 2022 and while those numbers have slipped, there has been a surge in mergers between energy companies flush with cash.
Chevron said last year that it was buying Hess in a $53 billion acquisition, though that deal faces headwinds. The company warned the buyout may be in jeopardy because it will require the approval of Exxon Mobil and a Chinese national oil company, which both hold rights to the development of an oil field off the coast of the South American nation Guyana where Hess is a big player.
In July of last year, Exxon Mobil said that it would pay $4.9 billion for Denbury Resources, an oil and gas producer that has entered the business of capturing and storing carbon and stands to benefit from changes in U.S. climate policy. Three months later, Exxon announced the proposed acquisition of shale operator Pioneer Natural Resources for $60 billion.
All of the proposed acquisitions could face pushback from the U.S. which, under the Biden administration, has stepped up antitrust reviews for energy companies and other sectors as well, such as tech.
Federal Trade Commission, which enforces federal antitrust law, asked for additional information from Exxon and Pioneer about their proposed deal. The request is a step the agency takes when reviewing whether a merger could be anticompetitive under U.S. law. Pioneer disclosed the request in a filing in January.
