CNBC reports that Chevron won the mediation against Exxon over its Guyana oil assets.

Chevron will continue with its

Purchase of $53 Billion

CNBC reported Friday that Hess had won a landmark court battle with Exxon Mobil, its larger rival, to gain access the largest oil find in decades.

This is a vindication of CEO Mike Wirth’s strategy, and it is a crucial win. Hess’ most attractive asset is the stake in the Stabroek Block offshore of Guyana which holds over 11 billion barrels. It's a source for growth at a time when Chevron is working to improve its performance.

Exxon, which operates the Stabroek Block with a 45% interest, and China's CNOOC, which holds 25%, filed arbitration claims against their partner Hess last year, arguing they had a contractual right-of-first-refusal to buy Hess' 30% interest in the joint venture. Hess and Chevron claimed that the preemptive right didn't apply to the sale the whole Hess Company.

Exxon's and CNOOC's claims triggered a legal fight that delayed Chevron’s acquisition for at least one year. The case also caught the attention of global oil companies, investors and attorneys who draft joint operating agreements to govern oil partnerships all over the world.

Experts said that the dispute was likely over the interpretation of a few words in a confidential joint operating contract between Exxon Hess CNOOC.

In May, an Exxon executive stated that the company had worked with Chevron in other countries and would continue to do so in Guyana should the arbitrators rule against Exxon.

The Stabroek Block is a valuable asset that has transformed Guyana's economy into one of the fastest-growing in the world. It also holds the potential for more oil discoveries. Reporting by Sheila Dang and Arunima in Bengaluru, with editing by Anil D’Silva.

(source: Reuters)