Chevron Corp. has agreed to buy Hess Corp. for $53 billion in an all-stock deal, in a bid to boost production growth and consolidate its position as one of the world’s leading oil and gas companies.

The acquisition will give Chevron a significant foothold in Guyana, the South American country that is one of the world’s newest oil producers. It will also enable the company to achieve faster production growth and generate more generous returns to investors, according to a statement from the companies on Monday.

The deal comes just a few weeks after Exxon Mobil Corp. agreed to buy shale-oil producer Pioneer Natural Resources Co. for $58 billion. The two deals underscore the US oil industry’s bet that oil and gas will remain central to the world’s energy mix for decades to come.

Chevron Chairman and Chief Executive Officer Mike Wirth said the combination will “strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets.”

Hess is a long-established independent US oil company with a storied history. It was founded in 1933 by 19-year-old Leon Hess, who started out running a single fuel-delivery truck and gradually expanded into a fleet of vehicles and a New Jersey oil terminal.

Hess bought its first oil tanker in 1948, built an oil refinery in 1957, and in 1960 opened the first of its iconic green and white gas stations that would become a common sight across the US northeast. By the time Leon Hess retired in 1995, he had built a multinational with assets in the North Sea, Alaska and the Caribbean.

Buying Hess will give Chevron 30% ownership of more than 11 billion barrels-equivalent of recoverable resources in Guyana, according to the statement. It also adds acreage in the Gulf of Mexico and the Bakken, a smaller US shale basin than Permian where production has already peaked.

Chevron said the deal will boost its estimated five-year production and free cash flow growth rates and extend them into the next decade. Returns to investors will also get a lift, with the company expecting to recommend an 8% increase in its first-quarter dividend in January, and a further $2.5 billion of share buybacks once the deal has closed.

The transaction has been unanimously approved by the boards of both companies and should close in the first half of 2024. It is subject to approval from Hess shareholders, regulators and other customary closing conditions.

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