Exxon loses Guyana fight as Chevron finalises Hess takeover
Chemical Giant Chevron Completes $53 Billion Hess Acquisition
Chevron has finalized its acquisition of Hess Corporation, marking a significant milestone in the oil industry. The completion of this $53 billion deal comes after an independent arbitration panel dismissed ExxonMobil’s claim of a contractual right of first refusal over Hess’ stake in the lucrative Stabroek Block offshore Guyana. This acquisition positions Chevron to capitalize on one of the largest oil discoveries in recent history.
Key Developments in the Acquisition
The acquisition of Hess was primarily driven by its interests in the Stabroek Block, which is projected to yield over 1.2 million barrels of oil and gas per day by 2027. This makes it a highly sought-after asset in the oil sector. Following Chevron’s announcement of the acquisition, both ExxonMobil and Chinese state-owned CNOOC filed arbitration claims, asserting their rights under a joint operating agreement that governed the consortium’s operations in Guyana. They believed this agreement entitled them to a right of first refusal regarding Hess’ sale to Chevron.
However, the arbitration panel rejected these claims, allowing Chevron to proceed with the transaction. Additionally, the Federal Trade Commission lifted previous restrictions, enabling Hess CEO John Hess to join Chevron’s board of directors. Under the terms of the merger, Hess shareholders will receive 1.0250 shares of Chevron for each share they hold, resulting in Chevron issuing approximately 301 million shares of common stock to Hess stockholders.
Chevron’s chairman and CEO, Mike Wirth, expressed confidence in the merger, stating, “This merger of two great American companies brings together the best in the industry. The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders.” This acquisition not only strengthens Chevron’s position in the global oil market but also sets the stage for future growth and innovation in the industry.
