Occidental Petroleum has agreed to buy energy producer CrownRock in a cash-and-stock deal valued at $12bn, the latest in a string of vast fossil fuel takeovers in the United States. The acquisition will increase Occidental’s acreage in the oil-rich Permian basin, America’s largest oil-producing area, and boost its production in the region by about 170,000 barrels of oil equivalent per day. Occidental will be left with more than 94,000 net acres across the Midland basin in Texas, part of the Permian. The purchase is the latest significant bet on the future of oil and gas production in the US, and the industry’s third substantial acquisition in as many months. In October ExxonMobil agreed to buy the shale group Pioneer Natural Resources for $59.5bn and Chevron announced plans to buy the oil producer Hess Corporation in a $53bn deal. Vicki Hollub, president and chief executive officer of Occidental, stressed that the company has focused on increasing its scale. “It’s the scale, it’s the inventory, and all of that has helped now for us also to step up our dividend,” she told CNBC, the financial news network. Environmental campaigners sounded the alarm after Monday’s announcement, lamenting it as another example of how energy giants are constructing “gigantic polluting empires”. Houston-based Occidental is backed by Berkshire Hathaway, the conglomerate run by the famed investor Warren Buffett. It will finance the purchase with $9.1bn of new debt, the issuance of about $1.7bn of common equity and the assumption of CrownRock’s $1.2bn of existing debt. The deal is expected to close in the first quarter of 2024. Occidental said it also includes about 1,700 undeveloped locations in the Permian. Buying CrownRock will leave Occidental “adds to the strongest and most differentiated portfolio that Occidental has ever had”, Hollub said in a statement. “We found CrownRock to be a strategic fit, giving us the opportunity to build scale in the Midland Basin and positioning us to drive value creation for our shareholders with immediate free cash flow accretion.” She added: “We are excited about combining CrownRock’s high-performing team into our organization and expect to continue Occidental’s exceptional operational and financial results for years to come.” “Occidental’s purchase of CrownRock is a multi-win proposition for CrownRock, our employees and customers, and our community,” said CrownQuest operating chief executive officer Tim Dunn. “We congratulate Occidental and look forward to seeing their historically successful company continue to grow and prosper.” Investors in Occidental suggested the agreement underlined its confidence in the fossil fuel market. Cole Smead, the head of Smead Capital Management, which owns about 5.9m shares of Occidental in its US portfolio, said the deal “shows the optimism that Vicki and the folks at [Occidental] exude right now about the future of the oil and gas business and the prices they are getting to take advantage of that”. Cassidy DiPaola, communications director at Fossil Free Media, said: “These mergers are creating gigantic polluting empires with dangerous levels of political influence. As oil companies consolidate power, it will become even harder to advance climate policies and hold the industry accountable for its role in the climate emergency.” The recent takeover deals “show these companies have tremendous confidence that their massive oil and gas reserves will continue generating profits despite the global urgency to phase down emissions,” DiPaola added. Shares in Occidental rose 0.9% during early trading in New York. It has a stock market value of about $50bn.