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Chevron eyes bigger payoff from US$55B Hess deal
…Stabroek Block seen as crown jewel
HOUSTON, Oct 8 (Reuters) – Chevron (CVX.N) CEO Mike Wirth told employees on Wednesday that he believes the company will outperform publicly stated financial targets given to investors following the acquisition of smaller oil producer Hess, whose prized asset includes a 30% stake in Guyana’s Stabroek Block-one of the world’s most prolific offshore oil discoveries.
Chief Executive Officer of Chevron, Mike Wirth
The No. 2 U.S. oil producer closed its $55 billion purchase of Hess in July after triumphing in a lengthy arbitration battle against larger rival Exxon Mobil (XOM.N)
Upon closing the deal, Chevron said it expected $1 billion in synergies and raised its free cash flow guidance for 2026 to $12.5 billion from $10 billion.
“In our last number of acquisitions that we’ve done, once we’ve closed the deal, we actually find more value,” Wirth said during an internal town hall meeting, audio of which was heard by Reuters. “I fully expect the (Hess) deal will meet and exceed what we’ve committed externally.”
Hess’ crown jewel was its 30% stake in the prolific Stabroek Block in Guyana, an oilfield that Exxon operates and is estimated to hold at least 11 billion barrels of oil. Completing the acquisition gave Chevron a much-needed boost to its oil and gas reserves and future growth prospects. Chevron will host an investor day on November 12 to formally provide updated guidance to shareholders.
Wirth said the company was continuing to examine possible projects to power large data centers in the U.S. when asked by Chief Corporate Affairs Officer Laura Lane about conversations he held with Big Tech executives like OpenAI CEO Sam Altman and Meta (META.O) CEO Mark Zuckerberg. “They need a lot of power,” he responded. “The scale of it is almost hard to describe.” The boom in artificial intelligence has driven electricity demand to new heights, and Chevron is looking at projects that would not be connected to the existing power grid that Wirth said is fragile and unable to handle the required power loads.
The meeting with employees took place days after a large fire broke out at Chevron’s 285,000 barrel-per-day El Segundo refinery in southern California. There were no injuries in the fire.
Orsted expanded rapidly over the past decade, but has recently faced higher costs from supply chain disruption and inflation.
Internal data shows that staff is not consistent in completing safety checklists before beginning work, Wirth told employees, adding that fatalities this year have been mostly among the company’s contractor workforce and that Chevron needed to ensure they were properly trained.
“What we need is more consistent and disciplined execution of those processes,” he said.
Asked about the town hall, a Chevron spokesperson said “our talented workforce is an essential part of the ongoing success of our company, and we engage regularly to align on strategic priorities and our shared purpose to safely provide affordable, reliable, ever cleaner energy that enables human progress.”
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