Published: August 6, 2024 |

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Chevron’s proposed purchase of oil producer Hess faces a lengthy new delay, with an arbitration panel not expected to hear a rival’s claim to Hess’ stake in a Guyana oil-producing joint venture until May 2025, the company said on Wednesday.

Exxon Mobil and partner CNOOC filed arbitration claims claiming a pre-emption right to any sale of Hess’ lucrative stake in the Guyana oil-producing joint venture, a move that threatened to block Chevron’s biggest deal in more than two decades.

Hess last October agreed to sell itself to rival Chevron in a $53 billion deal that would give Chevron a 30 percent stake in the consortium that controls all of Guyana’s oil production. Exxon leads the consortium with a 45 percent stake.

“Chevron and Hess had expected and requested that this hearing be held earlier, but the arbitrators’ common schedules did not make this possible. Exxon and CNOOC continue to ignore the plain language of the operating agreement, and Chevron and Hess remain confident that the arbitration will confirm that the Stabroek ROFR does not apply to the merger,” a Chevron spokesman said in a statement.

Chevron and Hess remain committed to the merger and look forward to combining the two companies, the spokesman added.

“We appreciate the arbitration panel giving this issue the due consideration it deserves. This matter is too important to rush through — all relevant facts and circumstances must be taken into consideration, and this will take time,” an Exxon spokesperson said.

Hess did not immediately reply to a request for comment.

The lengthy delay puts new strains on Chevron and Hess investors. In April, Hess had said it wanted the case to be heard by the third quarter and the arbitration completed by year-end.

Exxon has argued a right of first refusal clause in its Guyana joint operating agreement with partners Hess and CNOOC was triggered by the Chevron bid. Chevron and Hess dispute that claim.

Source: Reuters

Chevron is one of the world’s leading integrated energy companies. They believe affordable, reliable, and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance its business and the industry. They aim to grow their traditional oil and gas business, lower the carbon intensity of its operations, and grow new lower carbon businesses in renewable fuels, hydrogen, carbon capture, offsets, and other emerging technologies.

Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas with leading positions offshore Guyana, the Bakken shale play in North Dakota, the deepwater Gulf of Mexico and the Gulf of Thailand. Globally, Hess is recognized as an industry leader in environmental, social and governance performance and disclosure.

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