Exxon, Chevron still to appoint third arbitrator in fight for Hess stake in Stabroek Block

May 07, 2024 Court Stories, ExxonMobil, Features / Columnists, News, Oil & Gas

Kaieteur News – Oil giants Chevron and ExxonMobil are currently seeking a third arbitrator before the arbitration process enters the discovery stage.

Discovery is where both parties will obtain facts and information from each other that will support their case and aid in preparation for the hearing.

According to Bloomberg, “Exxon Mobil Corp Chief Executive Officer, Darren Woods foresees arbitration with Chevron Corp. over a premier Guyanese asset stretching into 2025 due to the importance of the case to both companies. The companies still need to appoint a third arbitrator before they go into the discovery phase, Woods said during an interview on CNBC on Monday. (Last)”

Woods also foresees arbitration with Chevron Corp. over a premier Guyanese asset stretching into 2025 due to the importance of the case to both companies. Chevron Corp. is optimistic in winning a stake in the prolific Stabroek Block following its purchase of Hess Corp. which it is hoping to finalise by mid-2024. Chevron said it is confident despite challenges by consortium partners, ExxonMobil and China National Offshore Oil Company (CNOOC).

Chevron takeover of Hess Corporation entails it assuming control of Hess’ stake in Stabroek, a significant offshore block. Currently, ExxonMobil operates the block with a 45 percent interest through Esso Exploration and Production Guyana Ltd., while Hess subsidiary Hess Guyana Exploration Ltd. (HEGL) holds a 30 percent interest. Additionally, China National Offshore Oil Corp’s CNOOC Petroleum Guyana Ltd. retains the remaining 25 percent.

ExxonMobil commenced arbitration proceedings on March 6 before the International Chamber of Commerce tribunal, arguing that a pre-emption right outlined in the Stabroek joint operating agreement (JOA) applies to Chevron’s acquisition of Hess. This right enables a partner to prevent a co-venturer from selling a stake to an outside party without first offering the stake to the partner.

Subsequently, ExxonMobil on March 11, and CNOOC, on March 15, filed for arbitration with opposing claims. These cases have been officially confirmed in filings with the U.S. Securities and Exchange Commission (SEC). To streamline the process, Hess revealed that CNOC agreed to consolidate the arbitration cases into one, with the authority administering the arbitration confirming the consolidation on March 26, 2024.

It was previously reported by this publication that the fight over Guyana’s oil, between oil majors Chevron and ExxonMobil have triggered an investigation into their assets by two federal agencies in the United States of America. According to Forbes, the assets of ExxonMobil and Chevron as well as other oil companies are currently being evaluated by the Securities and Exchange Commission, and the Federal Trade Commission because of climate related concerns and competition law. It is important to note that Exxon’s acquisition of Pioneer Natural Resources and Chevron’s acquisition of Hess placed them both at the top of the agencies’ list.

Furthermore, the two have been in a battle over Hess’ 30% stake in the Stabroek Block offshore Guyana – the centrepiece of Chevron’s deal for Hess Corporation. Chevron’s US$53 billion acquisition of Hess potentially gives it access to Hess’ stake in the Stabroek Block and positions the oil major to profit from Guyana’s emergence as an oil powerhouse, boasting one of the world’s fastest-growing economies.

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arbitration, Darren Woods, Hess, preparation, Stabroek Block

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