Exxon-Chevron Dispute over Hess Assets Extends into 2025, Exxon CEO Predicts
The long-running legal battle between Exxon Mobil and Chevron over Hess Corporation’s oil assets in Guyana is expected to continue into 2025, according to Exxon CEO Darren Woods. In an interview at the Milken Institute’s Global Conference in Los Angeles, Woods stated that the arbitration process could potentially drag on for another year.
Joint Operating Agreement at the Core of Dispute
Exxon contends that it has a right of first refusal on Hess’s assets in Guyana under a joint operating agreement that governs the South American nation’s prolific oil resources. The oil major initiated arbitration proceedings in March at the International Chamber of Commerce in Paris.
Woods emphasized the significance of the agreement in the ongoing dispute, noting that Exxon “wrote the agreement” governing the consortium that operates in Guyana. However, Chevron has disputed Exxon’s interpretation of the accord.
Chevron Rejects Exxon’s Claims
Chevron has rejected Exxon’s claims that the agreement applies to its pending all-stock deal to acquire Hess, which is valued at billion. The proposed transaction would create one of the largest oil and gas companies in the world.
Arbitration Timeline Uncertain
Woods acknowledged that the arbitration court will ultimately determine the timeline of the proceedings. Hess has requested that the panel hear the merits of the case in the third quarter of 2024, with an outcome potentially reached in the following quarter.
Chevron CEO Mike Wirth had previously indicated that this timeline would allow the parties to close their transaction soon after the arbitration concludes. However, Woods reiterated Exxon’s confidence in its position and its commitment to defending its shareholders’ interests.
Exxon’s Goal: Valuing Hess’s Assets
Woods clarified that Exxon is not seeking to acquire Hess but rather to safeguard its right first refusal and determine the value of Hess’s Guyana assets. Hess holds a 30% stake in the Stabroek block off the coast of Guyana, while Exxon has a 45% stake and China National Offshore Oil Corp. owns the remaining 25%.
The outcome of the arbitration will have a significant impact on the future of oil and gas production in Guyana. Exxon has repeatedly expressed its commitment to developing these valuable resources in a responsible and efficient manner.
