Come to a deal. We will have more on that, but still a super solid bid. We will break down all of this for you coming up. Coming up we will be talking to richard horton, and also mike wirth, the chevron chairman on the latest takeover. Leaders reconvene in about one hour for stimulus negotiations in brussels. Here with more is michael mckee. There is so many details within this. I guess the bigger question is, is this actually good . Michael that depends on your definition of good and the timing. Timing is the issue with getting the deal. They have been negotiating for quite some time. Everybody is focused on these negotiation. They talked through the night recessing at 6 00 in the morning. They should be Getting Started any with the new idea on the table. The big fight is over how much of the package is going to be in grants and how much in loans and have conditions attached. The frugal for countries led by luxembourg and austria and the danes have said they do not want most of this to go as grants. The head of the European Council billion would390 be in the form of grants, the rest in loans, and that seems to both sides closer to a deal because it is less than originally proposed by germany and france, but more than the frugal four want. There is a feeling they might be able to come to an agreement. That has had the euro bouncing. We will see where it settles today and we see the headlines. It is kind of a light week of data here in the u. S. And in europe. We have stimulus talks starting in washington, but that will be a long process. U. S. , buts go to the i want to get back to what you were saying about the summit. We see the spread between the german and the italians narrowing, but is anyone looking at what italy doesnt terms of reforms . Will this be a trucker style surveillance . Michael that is what we are waiting to see, under what conditions will this loan part be made to these countries. Most of this money is not going to be going out until 2022 or two thousand 23. 023. This is longerterm recovery money, so there is plenty of time to negotiate how to spend it, whatever you get. The question is how much are you going to have to prove to others for what you are doing. Wait really appreciate hearing from you. We turn to another big story in the takeover word, chevron agreeing to bite noble, the biggest transaction since the coronavirus triggered the slump in shale. Joining us now is mike wirth. I really appreciate you taking the time today. I listen to your conference call. The question i have is why now with noble when you could make the argument there is a lot more stuff that will go on sale in the next few months . This is a deal that builds on our strengths, high quality assets at a fair price, a good deal for the shareholders of both companies. It shows why we are different than many others in our second your. This is not just about the permit basin. Noble has a impressive position in the Eastern Mediterranean and west africa, in colorado, so this is a diversified company with assets that fit our capabilities well. There shareholders now have access to a stronger balance sheet, a stronger dividend and they retain upside exposure to eventual recovery in the economy. Alix it seems like the takeover was opportunistic which leads me to believe this is not the start of a chevron buying spree. Is that the correct interpretation . Ike to i think week we are always looking. We have to see a good portfolio fit. There are screens that we look at for any transaction could we have a high bar for these things and we have to believe these are assets that will compete for strength longterm and help us increase drinks longterm. Strength longterm. It has Strong Financial attributes and these are assets we expect to be in our portfolio for a long time to come. We think the time is right for both companies to engage in this combination. Little paperhad a with names scribbled on it, are there any more names on that sheet for possible takeovers . Mike we always have a long sheet of names that we look at, but there is also a strict set of criteria that we apply. We have a high bar and we look to create synergies here and improve returns. This is in line with our strategy, and so we are focused on this transaction paid we think it is a good one for the shareholders of both companies. That is really the focus today. Alix something that was interesting, i wonder what the bigger driver was for you, the International Assets, or was it conventional . Me, whereonal, excuse do you see the biggest appeal . Mike it is all of the above. I think they have been so successful in the Eastern Mediterranean that it does bring geopolitical of complexities that are pretty meaningful. Portfolio,iversified exposure to many different governments and geographies, and many decades of experience i think that is a very nice fit. Their position in the permian is good, but it is not the same scale as ours. I think youve got scale, efficiencies, and their position in colorado, we like unconventionals paid we have unconventionals in canada and in the u. S. In texas and new mexico. This gives us exposure to another basin that is highquality. The portfolio is a nice fit. Alix lets take the unconventional, you mentioned on the call this basin was more advanced. Is the right way to interpret that is when the market opens to sell that might be top on the list to sell . Mark i do not want to say that. What i was saying was we have multiple unconventional , and in thes i said eastern colorado unconventional basin, it is further along in the cycle so the risks are lower than they would be in argentina or canada. The geology is proven. Permianre can to the then the emerging unconventionals and some of the other countries. Sellinglking about assets, now is a really bad time to be a seller. You have any idea of what that price would be . Transactions most are not done based on the price of the day, but on the future. Right now we are in a time where there is uncertainty about the Health Situation of the world, the Economic Situation of the world, and people are somewhat conservative in terms of what theyre willing to do in these type transactions. I think is this is clarified, people will have an opinion on commodity price that begins to allow some of this transaction activity. It is less about the price of the day and more about seeing into the future. Alix we mentioned the International Assets and noble has a position in cyprus. Can you give me a sense of how you view that project based on priceepressed natural gas we are seeing . Mark mike right now oil and gas are in excess of demand so prices reflect that. This field is a nice resource opportunity. There are complexities in the building that field that need to be sorted. It could go into a Natural Gas Market and also into piped gas into a number of markets for that is all part of how a project like this is evaluated , the logistics in investments in the risks. We will work with the partners on that project over time to clarify those alternatives and come up with the right answer. Alix seems like that is a good template, sort of you need the international and the unconventional at the same time. Is that what i will be looking at forward for the industry . Mike certainly for a company like ours, we will not just be a permian player or an unconventional player. We have great strengths in offshore, onshore and across a wide variety of asset. That is important to meet different needs and to be able to develop different types of resources. For us i think you will look for , you know, we want to add quality assets. We have the technology and experience, and a Large Company like ours has capability. We have a broad aperture when we look at these kinds of opportunities. Alix focusing on the u. S. , from when you made your bid for anadarko, we are in a totally different world heading into the elections. Did the possibility of president ,iden coming into play at all whether it is on federal or nonfederal land, can you give me an insight on how that filter went . Mike we view this to the longterm value lens. These assets have a lifecycle that will outlast any individual u. S. Administration and will outlast multiple administrations. These considerations are certainly in the near term important to us as we look at how we run our business and engage with people in washington on matters of policy. The longerterm decisions are not driven by an election in any particular country, but a long view on the stability of the drivers of the economy and the quality of the resources for us to bring it to market and meet the customer needs in a way that is responsible. The Political Considerations are not the first ones we look at. Alix obviously it has to be synergistic, but with the energy plan, the story at of that was that oil industry is in a real trouble if biden gets elected president. How do you think about that as you look at Development Plans and how to allocate capital as drilling starts to come back. Engage with one, we administrations from both sides of the aisle. We try to engage and advocate for things that are good for the economy, good for the environment and good for the country. We have worked with democratic and republican administrations for decades to advocate for sound policies for the country. That is what we will do irrespective of the outcome of the election in november. The second thing, we have geopolitical risks in virtually every country we operate in print that is one of the reasons diversifiedhaving a portfolio is important. As you go through time with political challenges in any part of the world, they tend not to pile up at the same time everywhere. We manage these through good local relations and delivering on what we commit, but we also manage risk by having a broad no wonderrtfolio so region is critical to our future that a nearterm political challenge begins to threaten the enterprise. Question, at technical point, noble had one rig going as of may come and have oil prices around 40. How quickly might you ramp up your Unconventional Oil production here . Mike it is a little bit early for us to come up with any guidance on that. We had 20 rigs running last year, and we are down to a number lower than that right now. As we look through our planning processes into 2021 and beyond, we will make decisions about allocation of capital and activity based on how we see markets unfolding. It is early for me to speculate on how many breaks we might be running next year. Alix i really appreciate your time today as always. I know it has been a long morning. Posing a risk to the broader market, according to sean darby, and we will break that down next. This is bloomberg. Coronavirus vaccine being developed by the university of oxford, at astrazeneca has shown promising. Target the virus, and it was published today, and the sident and republics and republicans in congress have one more chance to keep the economy from getting worse. The four countries that have been holding up the e. U. Rescue package are set to sign off on a key proposal, the countries are fund beingith the made available. The rest will be in the form of low interest loans and the leaders will meet again to work out the remaining issues. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Francine joining us is sean darby. When you look at that leader summit, it seems that it has already make dan price into the markets paid what more can european stimulus take on too push up the equities . I think european equities are trending below that normal , so underperforming since like march on the global indices. Number two, a great deal of optimism is around the fact that this is the first time weve had some form of common issues, something very similar, and i think that takes a lot of the skepticism over the future. The other thing to bear in mind is that the money will be spent next year, sink for the equity markets that is a nice 2021,lity for going into so a lot of the money will be pushed into these economies and also it is being done via sectors or industries rather than necessarily just by a regional country basis. There is a lot of subtly to the european package rather than just the headline numbers in terms of amounts being spent. Alix with the exception of u. S. Tech, the european equities have been outperforming u. S. Equities over the past month. You think that that will continue . That the good news is looking at the unwinding of global and u. S. Money market funds, it seems that at least equities are getting a strong bid now after months of relatively an orphan class i think the good news for europe is that the base effects are probably less baked in been in the united states, a lot more optimism potentially for share prices and earnings to revive. I think in the u. S. Case the high concentration of ownership in tech is a concern because 22 of the s p 500 concentrated in just five stocks makes it a sort of fragile rally in some respects, at least something that European Forces do not necessarily share, that correlation of stocks or the high correlation to each other is not something present in europe and perhaps is the main drawback for the u. S. Equities at the moment. Francine we expect a lot of Earnings Report later in the week. What will you look out for . It is difficult to know what happens to lockdown, whether we go back to partial lockdown or for lockdown and what that means. Sean it is quite an interesting time. I think the good news is the weakness of the dollar over the last three months is going to give the S P Companies a big tailwind. As we are speaking, that will continue to allow analysts to be relatively optimistic despite some of the domestic issues on covid. And the work that we have done is that the markets are already and theinto 2021 now, current trough is nowhere near as important as what the markets are baking in for the next 12 months. Necessarilyis not as important as 2021 expected to be. I think the third is about diffidence, the reality is that forecast on the dividends we feel that that could be a disappointment for u. S. Companies given the fact that therell be a lot more concentration on restoring the balance sheet, particular if we the number of new covid cases rising globally. I think the dividend story is more challenging indices in. Alix what i am trying to understand, we saw what happened falls, butn netflix what risk are we in if Technology Actually rolls over, and what is the tradeoff . Sean that is a good point. Are bearish onwe the actual Business Models in any way, nor indeed the Balance Sheets. The fact that these companies have good Balance Sheets and good dividends and good visibility in earnings particularly during the Second Quarter has actually allowed those stocks to run hard. Relativealways a earnings gain, and a lot of sectors are beginning to revive the work that we have done suggest that energy and materials looking into 2021 will show better relative Profit Growth and some of the tech companies. It is really when that market decides to look at that come and we think we are coming close to it. I really appreciate at. I note you have been up for like a million hours. Think you very much. The u. S. Congress returns to work this week, the next with libby relief cantrill, coming up, on you on a day where you see the nasdaq outperform, as we inch closer to a europe group deal. This is bloomberg. Live from new york, i am steel. Some states are weighing to impose stayathome orders. President trump many of those cases are young people that would heal in a day had they have the sniffles and we put it down as a test. Percent,t is like 99. 7 people are going to get better. In many cases they get better quickly. Alix this comes as talks on the joiningef bill starts us now is Libby Cantrill read it is back to work for congress, and the question, when do they a deal, what will that what will be in it . Think the question around the stimulus has gone from if there would be a bill to now how big that bill is going to be, and to your point, kind somethingo we expect relatively quickly, and likely going to be bigger than even we have. We were sort of expecting that congress would likely pass something kind of 1 trillion size. That looks more like closer to 2 trillion. Congress breaks for their august earch dice reeses dice recess, so we expect this to be really a question of when not if and likely going to be quite large in size. Where will the second stemless package be spent . Will it hit the right places for the economy and the people need it most . B eco libby that is a great question. This is being called phase four, which is confusing, but this is a phase for bill that will likely include a pretty familiar mix of policies. We expect there to be an extension of the federal Unemployment Insurance, which expires at the end of july that will likely be a lower benefit than the current 600 a week but likely will be included in the bill at some level. We also expect increased state and local funding. If you remember, all of this money, the state and localities have only got 150 billion, so we expect more support for state cities, and also Liability Protection for this is something that is really important and we expect that in the bill as well. Ratchets up in terms of the price tag. Seen at have already red lines. The president s redline, and thennells redline, democrats, state and local, if we have all of these red lines you seem optimistic. I do not see how this can happen. Ibby i am optimistic because think basically almost everything is included. There has been the lines in the sand drawn, but you see some pretty flexible language coming both from the speaker and the majority leader. I think the payroll tax cut does not have a big bid on capitol hill on either side of the aisle. Republicans complain it is too expensive. Democrats complain it only helps people who have jobs. I think im more skeptical that that would be included, but at the end of the day, we think all of these red lines will likely soften. Something will come together. I amf the reasons optimistic is because the , and then of it course political expedien