Exxon and Chevron talked merger in 2020

In any case, as per The Wall Street Journal, Exxon Mobil CEO Darren Woods and Chevron chief Michael Wirth spoke about the potential merger when the pandemic crisis started to negatively affect the oil prices. The discussions were described as preliminary and aren't ongoing but could come back in the future, the people said.

Many industry experts, however, believe that a consolidation of the oil and gas industry is necessary to reduce costs and help companies overcome the pandemic slowdown. Oil prices have rebounded this year after a brutal spring 2020 in which U.S. crude fell into negative territory for the first time.

Exxon Mobil chief executive Darren Woods said Wan Zulkiflee's global industry expertise and insights will complement the United States oil producer's highly-experienced board, Business Wire reported.

Around that time, the shrinking demand for oil and gas placed both Chevron and Exxon in massive financial strain. Exxon and Chevron boast enormous oil and gas production assets both at home in the USA and around the world, sizable refining and chemical operations, plus instantly recognizable retail brands. It also asked employees worldwide to reapply for positions, Reuters reported.

The company unveiled plans for additional spending cuts of $3 billion in annual expenses expected by 2023, its latest belt-tightening move amid the industry-wide downturn.

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According to Reuters, the company reported a net annual loss of US$22.44 billion for 2020, compared with a full-year profit of US$14.34 billion the year before.

Last week, S&P Global Ratings put several big oil companies, including Chevron and Exxon, on notice that it could soon downgrade their credit ratings due to heightened concerns about climate change and a global push towards greener energy.

Lastly, Bloomberg reported that an industry analyst from Sankey Research, Paul Sankey, stated that the reason why the Exxon and Chevron merger makes sense is that both sides can benefit greatly from the deal.

A deal between Chevron and Exxon would reunite the two greatest descendants of the oil monopoly Standard Oil Of John D. Rockefeller.