If everything goes smoothly, the deal could be valued at $60bn, reported the Wall Street Journal.
This could be Exxon’s biggest deal in two decades and may complete in the coming days.
Exxon and Mobil merged operations in late 90s in a deal valued at $75.3bn.
With the acquisition of Pioneer, Exxon hopes to become a leading oil producer in the country’s most prolific basin as it costs relatively less to produce oil and gas there.
The talks, which are at an advanced stage, could still fail, the sources said.
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In response to a request from Bloomberg for comment on the news, Exxon and Pioneer said they do not comment on “market rumors”.
A deal with Pioneer would bring together two of the largest landowners in the Permian basin of Texas and New Mexico.
With the acquisition, Exxon’s production capacity from the basin is expected to reach around 1.2 million barrels of oil equivalent per day.
Additionally, it would add decades to Exxon’s list of the basin’s best drilling sites, extending its supply of low-cost, low-risk petroleum well past 2050 to support its vast refinery network on the Gulf Coast, the publication said.
With a market value of $436bn, Exxon produces an average of 3.8 million barrels of oil equivalent per day from its global activities, making it the largest oil producer in the US.