Exxon Mobil’s CEO, Darren Woods, has addressed the ongoing dispute between Exxon and Chevron over Hess Corporation’s Guyana assets, emphasizing that Exxon’s objective is to assert its rights over the assets rather than acquire Hess itself. Speaking publicly for the first time about the arbitration case that could potentially impede Chevron’s $53 billion deal for Hess, Woods stated that Exxon’s focus is on validating its rights within the existing contract with Hess.
At the CERAWeek energy conference in Houston, Woods emphasized that Exxon is committed to safeguarding and confirming its rights as stipulated in the contract governing the consortium responsible for oil production in Guyana. The disagreement arises from Exxon’s claim of a right of first refusal within the joint operating agreement, a point contested by Chevron and Hess.
While the joint operating agreement remains undisclosed, Hess has indicated that the deal may not meet its initial target of closure by mid-2024.
Exxon has not ruled out the possibility of acquiring Hess’s 30% stake in the Stabroek block offshore Guyana, potentially increasing its share to 75%. Currently, Exxon holds a 45% stake in the block, with Hess and China’s CNOOC Ltd as minority partners.
The Stabroek block is highly coveted due to its significant oil discoveries, set to yield over 1.2 million barrels of oil and gas daily by 2027. Woods outlined a three-stage process for any potential acquisition, starting with establishing preferential rights over Hess’s Guyana assets, followed by determining the asset’s value with partners, and finally evaluating the feasibility of increasing Exxon’s stake in the block.
Woods highlighted the importance of reaching an agreement on the existence of a preemption right in the contract before considering any stake acquisition. He expressed openness to various options beyond a 75% stake and underscored the need to assess capital requirements for such a decision.
Regarding timing and resolution, Woods acknowledged the complexity of the situation and expressed Exxon’s willingness to cooperate in swiftly resolving the preemption rights dispute. The arbitration process could extend over five to six months, adding uncertainty to the timeline for reaching a final resolution.
Despite the current dispute, Woods emphasized Exxon’s longstanding partnerships with Chevron globally and reiterated their commitment to constructive engagement in resolving the matter surrounding Hess’s assets in Guyana.