Exxon wants to participate in the sale of Hess Guyana’s asset, extract value

Dec 14, 2024 News

Kaieteur News- American oil giant, ExxonMobil Corporation wants to “participate” in Hess Corporation’s sale of its Guyana oil asset, and extract value from the work it has put into developing the country’s offshore fields – Reuters reported.

In October 2023, it was announced that American oil giant Chevron will be acquiring Hess Corporation (the third-partner in the Stabroek Block) for some US$53 billion. The takeover would give Chevron access to Hess’ most valuable asset in Guyana. However, Exxon, the operator of the block and CNOOC, filed for arbitration at the International Chamber of Commerce in Paris, arguing that they have a right of first refusal over Hess’ stake.

Exxon wants to participate in the sale of Hess Guyana’s asset, extract value

Exxon CEO Darren Woods. (sale of Hess Guyana’s asset)

ExxonMobil Guyana is the operator of the block and holds a 45% interest, while Hess Guyana holds 30% interest and CNOOC Petroleum Guyana Limited with 25% interest.

Exxon’s CEO Darren Woods on Wednesday told Wall Street analysts in his most significant comments on the arbitration case to date, “We developed the value of that asset. We have the right to consider the value of that asset in this transaction, and then the right to take an option on it.” Woods added, “We have an opportunity, as does CNOOC, the other partner, to participate in that opportunity to have the right of first refusal.”

Reuters reported that a three-person panel in May 2025 is to decide whether Hess’s deal to sell itself to Chevron can go ahead on its original terms. Notably, representatives for Hess and Chevron declined to comment when contacted for a comment. Analysts have put the value of Hess Guyana between 60% and 80% of Chevron’s proposed US$53 billion purchase of Hess.

The Stabroek Block which covers an area of 6.6 million acres is estimated to hold 11.6 billion barrels of oil. To date, Exxon has obtained approval from the Government of Guyana for six development projects in the Stabroek Block – Liza Phase One, Liza Phase Two, Payara, Yellowtail, Uaru and Whiptail. The first three projects are already producing oil at a daily estimated rate of 640,000 barrels per day (bpd). With the addition of Hammerhead and Longtail, Exxon said this will expand gross production in Guyana to approximately 1.3 million barrels per day, with total production capacity expected to reach 1.7 million barrels per day on an investment basis.

Chevron and Hess have previously rejected the claim, arguing the deal is structured as a merger and Hess’s Guyana holdings remain intact. Hess has said if the Chevron deal is not concluded it would not separately sell its Guyana properties to Exxon or anyone else.

Woods brushed off Hess’s view of a loss at arbitration souring a sale, saying “that’s their construct, not ours.” Exxon wants the three-person arbitration panel to consider the value of Hess Guyana as part of the deliberations. “We’ll look at the value and see if that value is in the best interest of the company, the corporation and the shareholders,” added Exxon Vice Chairman Neil Chapman.

(Exxon wants to participate in the sale of Hess Guyana’s asset, extract value)

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Chevron, CNOOC, Exxon, Hess, merger

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