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Exxon Continues to Invest in North American Oil

In an effort to compete with Chinese and Russian companies for oil rich land in Western Canada, Exxon Mobil agreed today to buy Canadian oil and gas exploration company Celtic for $3.1 billion. According to the New York Times:

The takeover is the latest effort by major oil concerns to tap the oil-rich rock formations of North America, including the province of Alberta, where Celtic is based. In July, the Chinese company Cnooc bid $15 billion forĀ Nexen, a significantly bigger explorer based in Calgary, in large part to get in on the shale boom.

This is part of a larger move made on the part of Exxon to tap into oil reserves that currently exist in North America, but are as of yet inaccessible. Anticipating that it would be necessary to acquire this harder-to-reach oil, Exxon acquired a natural gas company named XTO in 2009 in order to utilize its advanced drilling technology.

These moves reflect a larger reality in the world of fossil fuels. If demand for oil remains constant – and all indications are that it will for the forseeable future – then gas giants like Exxon Mobile will have to resort to increasingly more complicated methods of extraction. This could only mean extra prices will be passed on to the consumer, making now the time to lock in before the next spike.

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