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Chevron Corp.'s Jack/St. Malo project operates in deepwater Gulf of Mexico. Chevron is buying Anadarko Petroleum for $33 billion, energizing its oil and gas drilling capabilities in the Gulf of Mexico and Texas.

Chevron is buying Anadarko Petroleum for $33 billion, energizing its oil and gas drilling capabilities in Texas and the Gulf of Mexico while vaulting itself into a new league.

Tyler Gray, president and general counsel of the Louisiana Mid-Continent Oil and Gas Association, said the combination of assets will make Chevron the largest oil producer in the gulf, assuming the company keeps all of its rigs and doesn’t shed anything. “But that’s a long way away,” said Gray, who represents the oil and gas industry operating in Louisiana and the gulf. “It’s hard to speculate.”

The combined company will remain far behind Exxon Mobil Corp. and Royal Dutch Shell Plc. in market capitalization, but Chevron will jump from being the world's fourth-biggest energy producer to second, according to Wood Mackenzie.

David Dismukes, head of the Center for Energy Studies at LSU, said putting Chevron and Anadarko together will create synergy. “This enhances the competitiveness of the merged company because they bring the best of what both have learned,” he said. “There’s a lot they both bring to the table.”

Eric Smith, associate director of the Tulane Energy Institute, said while the deal will lead to a reduction in white-collar workers because of job duplication, Anadarko has only a small workforce in Louisiana. Chevron has an office in Covington with several hundred employees.

“We’ll not see a huge influx of jobs,” he said.

But there could be a potential for more offshore drilling activity because of all the leases Chevron and Anadarko currently have. Not only would the economies of scale make drilling more attractive, but Smith said Chevron can utilize existing Anadarko production facilities. “It’s a lot quicker to tie back to an existing facility than to build a new one,” he said.

The cash-and-stock deal announced Friday comes as U.S. crude prices have shot up 40% this year.

Chevron gets access to Anadarko's liquid natural gas operations in Mozambique and it would control a 75-mile-wide corridor across the Delaware Basin, a region in West Texas and southern New Mexico bountiful with natural gas.

Oil prices have been on the rise as OPEC members cut production.

OPEC said this week that its output had been slashed by more than a half-million barrels a day last month to just over 30 million barrels, a level not seen since early 2015.

That is largely being driven by energy powerhouse Saudi Arabia, which last month removed another 324,000 barrels of oil per day from the market.

U.S. crude was selling for nearly $65 per barrel Friday. But there are signals that global economic growth is slowing.

The acquisition of Anadarko could give Chevron a little more breathing room when crude prices do fall.

With savings the companies plan to book and rising cash flow, Chevron said Friday that it will bump up annual stock buybacks to $5 billion from $4 billion a year, once the transaction is complete.

Chevron plans to divest $15 billion to $20 billion in assets between 2020 and 2022, with proceeds used to lower debt and to return additional cash to shareholders, the company said.

"This transaction builds strength on strength for Chevron," said Chairman and CEO Michael Wirth. "The combination of Anadarko's premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deep-water Gulf of Mexico capabilities and will grow our LNG business."

Chevron Corp. will keep its headquarters in San Ramon, California. Anadarko Petroleum Corp. is based in The Woodlands, Texas.