Latest update June 1st, 2026 12:37 AM
Exxon, CNOOC merge Guyana arbitration claims against Chevron over Hess acquisition
Kaieteur News – American oil giant, ExxonMobil and China’s CNOOC have merged their arbitration claims against Chevron Corporation planned acquisition of Hess Corporation, which would give the U.S oil giant access to Guyana’s Stabroek Block.
Last October, it was announced Chevron will be acquiring Hess for US$53 billion. The takeover would give Chevron access to Hess’ most valuable asset in Guyana. The operator of the Stabroek Block is ExxonMobil Guyana, who holds a 45% interest, while Hess Guyana holds 30% interest and CNOOC Petroleum Guyana Limited with 25% interest.
Bloomberg reported that Chevron regulatory filing on Thursday included a letter from Hess to stockholders, stating that the unified arbitration was approved after a March 26 application. “Chevron and Hess believe that ExxonMobil’s and CNOOC’s asserted claims are without merit,” according to the filing. Hess “intends to vigorously defend its position in the arbitration proceedings and expects the arbitration tribunal will confirm that the Stabroek ROFR does not apply to the merger.”
The dispute over the a contract written more than a decade ago is unprecedented in the modern history of the oil and gas industry and threatens to upend Chevron’s deal to buy Hess. In the filing, Hess noted that Exxon published a statement in October “indicating its support” for the deal before reversing course six months later. For its part, Hess reiterated its confidence in winning the arbitration case “based on the express terms of the Stabroek” contract, it said. Exxon has accused Chevron and Hess of attempting to “circumvent” the contract, which is private.
Exxon was the first to moved for arbitration, filing its case at the International Chamber of Commerce in Paris, arguing that it has a right of first refusal over Hess’ stake. CNOOC recently revealed that it had also filed for arbitration to uphold its right to Hess stake in the block. The fight over Guyana’s Stabroek Block resources finds its genesis in the lopsided oil deal signed by the APNU+AFC Coalition administration back in 2016. This deal extends favourable terms to the oil companies, providing unlimited tax waivers, uncapped interest rates and perhaps the lowest royalty rates known to the industry, at a meager two percent. Production from the Stabroek Block developments sits above 600,000 bdp – with Exxon having the Liza 1, Liza 2 and the Payara projects online. The oil companies have embarked on an aggressive drilling campaign in the Stabroek Block targeting three other developments: Yellowtail, Uaru and Whiptail projects. It should be noted that Yellowtail and Uaru have already been approved, while Whiptail is under review awaiting government approval any day now.
Moreover, in other sections of the international media landscape, it was reported that Hess on Thursday said in a securities filing that its board unanimously recommended shareholders vote in favor of the company’s sale to Chevron. CNBC reported that Hess U.S. Securities and Exchange filing said, the merger is “fair to and in the best interests of the Hess stockholders.” “We look forward to continuing our successful operations in the Stabroek block with Chevron, pending the deal closing,” Exxon wrote in reference to the deal, Hess said.
Share this:
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
