Exxon makes $56 billion bet on natural gas

NEW YORK - The oil giant ExxonMobil has placed a US$41 billion ($56 billion) bet on the future of natural gas with the acquisition of Texas-based XTO, putting pressure on its rivals to follow suit.

Major oil companies have been expanding natural gas operations in the expectation that environmental regulation could force a shift from oil to more clean-burning fuels.

XTO has operations across the US and is a specialist in extracting gas from unconventional places, such as shale rock.

The deal is the biggest in the US energy sector since Chevron bought Texaco in 2000, and sector experts said other oil firms are likely to consider acquisitions of their own.

"This is a historic deal that marks a dramatic shift on the part of the premier major integrated firm to bet large on US unconventional gas," said Eric Chenoweth, an analyst at Morningstar.

"Other major integrated firms, both European and domestic, have shown greater interest in unconventional gas over the past year, but this has often involved smaller partnerships. Exxon has brought out its cannons where others have been using small arms."

- INDEPENDENT