An arbitration panel will investigate the undisclosed value of Hess Corporation’s oil assets in Guyana amid a legal clash between Exxon Mobil and Chevron. Chevron’s $53 billion offer for Hess, one of the largest deals in recent oil industry history, centers on Hess’s stake in a lucrative Guyana oil field operated by Exxon.
Exxon and China’s CNOOC have contested the acquisition, asserting a contractual right to purchase Hess’s stake in the field, which is now under arbitration. Exxon argues that the significant value of the Guyana asset means the deal constitutes an asset acquisition disguised as a merger, triggering a change of control that would activate their right of first refusal.
Conversely, Chevron and Hess maintain that the valuation of the Guyana asset is irrelevant to the arbitration, contending that there is no change in Hess’s control over its Guyana operations.
Valuation plays a crucial role in disputes over changes of control, according to Christopher B. Strong from the Association of International Energy Negotiators. The key asset in question is Hess’s 30% stake in the Stabroek offshore joint venture, which has discovered approximately 11.6 billion barrels of oil and gas. The consortium, which includes Exxon (45% stake) and CNOOC (25%), generated $6.33 billion in profits last year, with production expected to triple by 2027.
Exxon CEO Darren Woods has indicated a willingness to make a counterbid for Hess’s stake, contingent upon the arbitration panel recognizing their claim to first refusal and determining a price. Analysts estimate that Hess’s Guyana assets account for about 70% of Chevron’s $53 billion bid.