Merger talks between Occidental Petroleum and Anadarko Petroleum were ongoing when Chevron announced on Friday it would acquire Anadarko for $33 billion, preventing Occidental from potentially upping its offer price, sources tell CNBC.

The deal announcement by Chevron cut short the talks between Occidental and Anadarko, the sources told CNBC's David Faber, who reported the rival bid by Houston-based Occidental on Friday. The Occidental bid had reached the mid-$70s per share and was being structured as a 40% cash deal.

Occidental was under the impression talks would extend into the weekend, with an opportunity to increase its bid, people familiar with the situation say. Mergers and acquisitions are often announced on Monday, and the Friday announcement caught some parties involved in the process by surprise.

Occidental continues to consider whether it should take the price to shareholders in an unsolicited offer, the sources say. The breakup fee for the Chevron-Anadarko deal is said to be 3% of the deal.