ExxonMobil’s Senior Vice President Neil Chapman said Thursday that operations and investment plans in Guyana remain “100% aligned” among the Stabroek Block partners, despite an ongoing arbitration that could impact the ownership structure of the prolific offshore asset.
“Zero change,” Chapman said at the 41st Bernstein Energy Conference in New York. “This is a contractual dispute that happens, but in terms of operations, in terms of investments, we’re 100% aligned — no change at all.”
At issue is whether ExxonMobil and CNOOC, Hess’s partners in Guyana’s Stabroek Block, can exercise a right of first refusal over Hess’s 30% stake in the block, as part of Chevron’s proposed US$53 billion acquisition of Hess Corporation. The arbitration proceedings, governed by the International Chamber of Commerce (ICC), concluded their hearing phase this week in London. A decision is expected within two to three months.
Hess and Chevron argue that the right of first refusal clause in the joint operating agreement is not triggered by the sale of Hess as a whole. Exxon and CNOOC maintain that the clause applies because the deal would result in Chevron acquiring Hess’s interest in the block, which is home to more than 11 billion barrels of oil equivalent.
Chapman explained that while such contractual disputes are not uncommon in the oil industry, they are typically kept confidential. “One of the unfortunate parts about this whole arbitration is it’s in the public domain…normally they’re not,” he said.
Still, Chapman said ExxonMobil remains confident in its position. “We believe very strongly that we have the right of first refusal. The Chinese [CNOOC] believe the same thing. That’s why we’re in arbitration.”
Regardless of the outcome, he said operations will continue seamlessly. “If the judges decide that’s not the case, then we get a new partner. Business carries on as normal. We have partnerships with Chevron all over the world. There’s been no change in terms of how we’re working together at all.”
ExxonMobil operates the Stabroek Block, where production has surged since first oil in 2019 and is expected to rise significantly in the coming years with multiple new projects already sanctioned.
READ: ExxonMobil’s Guyana oil ventures: A roadmap to 1.7 million b/d | OilNOW
