ExxonMobil files for arbitration on Chevron bid in Guyana

ExxonMobil arbitration bid targets Chevron-Hess merger

GEORGETOWN, March 6, 2024 – ExxonMobil has filed for arbitration to protect its right of first refusal in Guyana’s Stabroek block, jeopardising Chevron’s bid to acquire 30% via its merger with Hess Corporation, Bloomberg reported on Wednesday.

A Chevron spokesperson responded late on Wednesday. “We remain fully committed to the transaction, and are confident in our position,” said Chevron spokesperson Braden Reddall said. “We look forward to closing the transaction.”

The claim argues that the Chevron-Hess merger violates ExxonMobil’s pre-emption rights in the licence.

ExxonMobil senior vice-president Neil Chapman said the merger “attempted to circumvent the commercial purpose” of the contract in Guyana, while Chevron has maintained that ExxonMobil had no prospects of acquiring the stake.

Analysts cited by Bloomberg were divided on the arbitration’s prospects for breaking up the merger.

In October, Chevron announced it would buy Hess under a USD 53-billion deal. Hess’s stake in The Stabroek block was cited as a key driver of the deal, along with its Bakken and Gulf of Mexico assets.

ExxonMobil operates the Stabroek block with a 45% stake. After Hess’s 30% stake, the remaining 25% is held by China’s CNOOC.

The block’s recoverable resources have been estimated at 11 billion boe.

ExxonMobil’s filing was made Wednesday morning at the International Chamber of Commerce in Paris.

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