There was another bid for Anadarko Petroleum, the oil and gas explorer that Chevron said it was buying for $65 a share in cash and stock.

Before Friday's announcement of the deal, Occidental Petroleum had bid more than $70 a share for Anadarko in cash and stock, people familiar with the situation told CNBC, but the company ultimately decided to go with Chevron.

In addition to being higher, the Occidental bid contained more cash than the Chevron offer and would have required a shareholder vote, the people said.

However, the people familiar said there were some structural issues with the Occidental bid with which Anadarko may not have been as comfortable.

Occidental is now considering its options, people familiar with the matter told CNBC, but it's unclear if the company will launch a hostile bid for Anadarko.

The Chevron-Anadarko breakup fee is said to be 3% of the deal price, which is nearly $1 billion. That transaction will expand the second biggest U.S. energy company's operations in shale oil and gas production, offshore drilling and liquefied natural gas exports. The deal also would be the 11th biggest in history for an energy and power company, according to Refinitiv.

– CNBC's Michael Sheetz contributed to this report.