A decision has been reached in the high-stakes arbitration between ExxonMobil and Hess Corporation over a prized oil asset offshore Guyana, according to a Reuters report this week.
The ruling by the Paris-based International Chamber of Commerce (ICC) will determine whether U.S. oil major Chevron can proceed with its proposed acquisition of Hess, announced in late 2023.
While the exact content of the arbitration decision has not yet been disclosed, the ICC is now in the final stages of processing it before it is formally shared with the parties involved, Reuters said, referencing two sources close to the matter.
ExxonMobil, which operates the Stabroek Block with a 45% interest, has argued, along with partner CNOOC, that it holds a pre-emption right to Hess’ 30% stake in the block. The companies say this right should have been triggered by Hess’ proposed merger with Chevron. CNOOC holds the remaining 25% interest.
Chevron and Hess maintain that the right of first refusal does not apply, as the deal involves the purchase of Hess Corporation as a whole, rather than a direct sale of its Stabroek asset.
“We remain confident in our position and appreciate the arbitration panel giving this issue the due consideration it deserves,” an Exxon spokesperson reportedly told Reuters. The publication said the other companies and the ICC did not immediately respond to its requests for comment.
Nearly one in seven dollars of Exxon’s global profit came from Guyana in 2024 | OilNOW
Chevron’s bid to acquire Hess is widely seen as an attempt to secure access to the Stabroek Block, which has been at the center of a deepwater oil boom in Guyana. With more than 11 billion barrels of recoverable resources already discovered, the block is a core asset in the South American nation’s transformation into one of the world’s fastest-growing oil producers.
The arbitration outcome is pivotal for Chevron CEO Mike Wirth, who has staked his company’s near-term growth strategy on the deal. Without Hess’ Guyana portfolio, Chevron could face challenges in shoring up its production reserves.
If the arbitration panel rules against Hess and Chevron, or if no settlement can be reached with Exxon and CNOOC, the acquisition could fall through, based on the current terms of the agreement, Reuters said.
It is unclear when the ruling will be made public.
