Exxon is confident that it will prevail in the dispute over Chevron Hess deal

Exxon Mobil senior vice president Neil Chapman announced on Thursday that the arbitration proceedings for Exxon Mobil’s contract dispute with Chevron over its planned acquisition of Hess ended this week. A decision is expected within two to three month, he said.

While speaking at a Bernstein conference, Chapman said he was confident that a three-member arbitration panel would rule in Exxon's favor and determine it had a right-of-first-refusal to purchase Hess' stake in a Guyana oil joint venture operated by Exxon. Chevron has struck a deal worth $53 billion to purchase Hess by October 2023. The prize asset is Hess's 30% stake in Stabroek Block off the coasts of Guyana.

The deal was crucial to Chevron CEO Mike Wirth’s strategy to improve the company’s performance. But it was delayed last year when Exxon, CNOOC and the other minority partners in the block filed arbitration claims asserting preemptive rights over Hess’ interest in the project.

As the arbitral panel deliberates, the fate of Chevron’s acquisition is now in doubt.

Hess' spokesperson stated, "We are confident that the arbitral tribunal will confirm that the Stabroek first refusal right does not apply to this merger." Chevron didn't immediately respond to a request for comment.

Chapman stated that there would not be any change in the event Chevron won and gained entry into the Stabroek Block, while expressing confidence that Exxon will prevail in the arbitral proceedings.

If the judges rule that this is not true, we will find a new partner. He said that business would continue as usual.

(source: Reuters)