Latest update April 11th, 2025 9:20 AM
ExxonM’s Chinese partner eyes Hess’ 30% shares in Stabroek Block
…promises to maximise benefits for investors if arbitration case goes in their favour
Kaieteur News- China National Offshore Oil Corporation (CNOOC), a partner in the prolific Stabroek Block, has stated that if the company is successful at the upcoming arbitration asserting its right over American oil company Hess’ stake in Guyana’s golden oil field, the company will look at ways to maximise benefits for its investors.
A legal official at CNOOC, Xu Yugao
American oil giant Chevron is pursuing a US$53 billion merger with Hess. This takeover would give Chevron access to Hess’ most valuable asset – a 30% stake in the Stabroek Block – an oil block estimated to hold 11.6 billion barrels of oil. However, American oil giant ExxonMobil, 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. Despite this, Hess expressed confidence that the merger would proceed as planned.
ExxonMobil Guyana holds a 45% interest, while Hess Guyana holds 30% interest and CNOOC Petroleum Guyana Limited with 25% interest.
On March 27, CNOOC had their 2024 Annual Briefing. During this event, the company was asked about the upcoming arbitration.
According to the translated version of the press conference, Xu Yugao, a CNOOC official, stated that the arbitration is proceeding according to the SEC procedures.
“In July 2024, the three arbitrators were appointed, and the tribunal has been set up, and the pre-meeting before the tribunal was also held, and the relevant evidence and the documents were also produced as well,” Yugao stated.
He noted that by the timeline in May the tribunal will be called and noted that CNOOC remains confident in its case.
To this end, he explained that if the case goes in favor of CNOOC and Exxon in their claim to the right to first refusal over Hess Stabroek Block shares, the company will look at avenues to exercise their rights, depending on benefits to the company and shareholders
The Stabroek Block
“We will keep the market updated and disclose the relevant information when it’s the appropriate time. Of course, it’s depending on the results of the arbitration first,” he added. Upstream Online quotes Yugao as stating, “We remain confident in our position and will take the necessary steps to protect our company’s and shareholders’ interests…If we are successful in arbitration, we will evaluate the best course of action that maximises value for the company and our investors.”
Notably, Exxon has also shared a similar position, with the oil giant’s Chief Executive Officer (CEO) Darren Woods saying, “We have a right… why would we give that away?”
Since production commenced in December 2019, Exxon is now producing 660,000 barrels per day (bpd) from three developments: Liza Phase 1, Liza Phase 2 and Payara.
The oil companies have embarked on an aggressive drilling campaign in the Stabroek Block with three more approved developments to come onstream: Yellowtail, Uaru and Whiptail projects. This year, Exxon’s largest deep-water project to date in Guyana, Yellowtail, will commence oil production.
Notably, Exxon has already made applications for approval for a seventh and eighth development, namely Hammerhead and Longtail.
The fight over Guyana’s Stabroek Block resources comes at a time when the oil companies benefit from a lopsided oil deal signed by the APNU+AFC Coalition administration back in 2016. This deal extends favourable terms to the oil companies, providing tax waivers, allows 75% cost recovery from revenues generated from the block and a mere 2% royalty to Guyana.
(ExxonM’s Chinese partner eyes Hess’ 30% shares in Stabroek Block)
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