American oil giant Chevron gains access to Guyana’s Stabroek Block through US$53B buy-out of Hess

Jul 19, 2025 News

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…Exxon welcomes company after losing arbitration but says had to consider value of the successful venture

Kaieteur News – American oil giant, Chevron Corporation, is now a 30 per cent shareholder in Guyana’s Stabroek Block after completing the US$53 billion acquisition of Hess Corporation, following a favorable arbitration outcome regarding Hess’ Guyana asset.

In late 2023, the acquisition of Hess was announced. The deal gave Chevron access to Hess’ most valuable asset, a 30 per cent stake in the Stabroek Block, which is estimated to hold 11.6 billion barrels of oil equivalent. However, the move prompted the other partners in the Stabroek Block, ExxonMobil Corporation and China National Offshore Oil Corporation (CNOOC) to approach the Paris-based International Chamber of Commerce (ICC) to examine their preemption rights over Hess’ share.

In May 2025, the oil companies, through their lawyers, faced off before a three-member arbitration tribunal. Exxon had argued that it wanted its right of first refusal recognised before deciding on its strategy for the Stabroek Block. Chevron, however, contended that it had conducted extensive due diligence on the operating agreement between Exxon and Hess in Guyana and had significant experience with similar agreements worldwide.

On Friday, it was announced that Chevron had completed the acquisition. Notably, had the arbitrator ruled in favor of Exxon and CNOOC, Chevron was prepared to walk away from the deal entirely.

In a statement, Chevron said, “the combined company has one of the most advantaged and differentiated portfolios in the industry, with leading positions in critical energy markets around the world and a high cash margin production profile.”

The oil major highlighted that the acquisition adds world-class assets, including Guyana and the U.S. Bakken, to its diversified global portfolio.

It was stated, “Chevron now owns a 30 per cent position in the Guyana Stabroek Block, which has more than 11 billion barrels of oil equivalent discovered recoverable resource; 463 thousand net acres of high-quality inventory in the Bakken; complementary assets in the Gulf of America with 31 thousand barrels of oil equivalent per day; and natural gas assets in Southeast Asia with 57 thousand barrels of oil equivalent per day.”

On July 17, the Federal Trade Commission (FTC) lifted its earlier restriction, clearing the way for John Hess to join Chevron’s Board of Directors, subject to board approval.

For its part, Exxon said it disagrees with the ICC panel’s interpretation but respects the arbitration and dispute resolution process. The company reiterated that ExxonMobil and CNOOC are aligned and had a duty to ensure contract terms are always adhered to and not set a bad precedent for themselves and the industry.

Exxon said too, “Given the significant value we’ve created in the development of the Guyana resource, we believed we had a clear duty to our investors to consider our preemption rights to protect the value we created through our innovation and hard work at a time when no one knew just how successful this venture would become.”

However, Exxon welcomed Chevron to the venture and said it look forward to continued industry-leading performance and value creation in Guyana for all parties involved.

Stabroek Block

The Stabroek Block located about 120 miles offshore Guyana, spans 6.6 million acres. Oil production began in December 2019 and has grown to 650,000 barrels per day (bpd) from three sanctioned projects: Liza Phase 1, Liza Phase 2, and Payara. This output is expected to increase with the upcoming start-up of Yellowtail, the fourth development, later this year.

ExxonMobil Guyana holds a 45% interest, Hess Guyana holds 30%, and CNOOC Petroleum Guyana Limited holds the remaining 25%. Exxon has two other sanctioned projects under its belt: Uaru and Whiptail. It has also submitted an Environmental Impact Assessment (EIA) for its seventh project, Hammerhead, with production targeted for 2029. Additionally, the company has filed an application for an eighth development, Longtail.

Stabroek Block Agreement

The agreement governing the Stabroek Block extends favorable terms to the oil companies.  According to the agreement, Stabroek Block partners can recover 75 per cent of oil produced to cover investment costs. The remaining 25 per cent is considered profit and is split equally between Guyana and the consortium, giving each 12.5 per cent. However, the consortium pays a 2 per cent royalty from its share to Guyana. From Guyana’s 14.5 per cent total take, the government must pay the oil companies’ taxes.

The deal stipulates that the sum equivalent to the taxes owed by the companies must be paid by the minister responsible for petroleum to the commissioner general of the Guyana Revenue Authority (GRA).

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• arbitration, Chevron, Darren Woods, Exxon, Hess, Michael Wirth, Stabroek Block

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