In a dramatic twist for the global energy sector, ExxonMobil has thrown a legal spanner into Chevron's proposed $53bn takeover of Hess Corporation. The oil giant – alongside China's CNOOC – has initiated arbitration proceedings that could derail one of the industry's most significant deals in years.
The Stakes Behind the Dispute
At the heart of the conflict lies Guyana's Stabroek block, a crown jewel in Hess's portfolio containing an estimated 11 billion barrels of oil. Exxon (45% stake) and CNOOC (25%) argue their joint operating agreement grants them first refusal rights over Hess's 30% share – a claim Chevron vigorously disputes.
Chevron's Strategic Gambit
The California-based energy titan maintains its acquisition of Hess remains on track for early 2024 completion. "This arbitration has no merit," Chevron stated, emphasising the deal's importance for expanding its low-cost, long-term production capacity.
Exxon's Countermove
Exxon's arbitration filing with the International Chamber of Commerce signals its determination to protect what it views as contractual rights to Guyana's prolific reserves. The move comes as Exxon reported record-breaking quarterly profits of $11.4bn.
Market Reactions and Analyst Views
Energy analysts suggest the outcome could reshape competitive dynamics:
- Potential delay in deal closure until Q3 2024
- Hess shares dipped 3.1% following the announcement
- Chevron stock showed marginal gains
The dispute highlights the intensifying scramble for premium oil assets as companies balance energy transition pressures with current profitability demands. With Guyana's output projected to hit 1.2 million barrels per day by 2027, the arbitration's outcome carries billion-dollar consequences for all parties involved.
