Chevron CEO expects Exxon arbitration to be resolved in coming months
(Bloomberg) — Chevron Corp. expects to resolve a dispute with Exxon Mobil Corp. over a Guyana oil contract in the coming months, allowing it to complete its $53 billion acquisition of Hess Corp. this year.
Exxon began arbitration proceedings in March, arguing that it has the right of first refusal over Hess’s 30% stake in the Stabroek block and the 45% stake owned by Exxon. Hayes has asked for a hearing in the third quarter and a decision in the fourth quarter.
“This is a period of time that we are working on in a process that is still unfolding,” Chevron Chief Executive Officer Mike Wirth said in a Bloomberg Television interview on Monday. Five to six months “is a sufficient time frame within which specific contract provisions can be clarified.” Here.”
Both Exxon and Chevron have appointed an arbitrator who will be a three-person panel that will decide the case. Chevron argues that Exxon’s right of first refusal does not apply because its deal is a corporate merger with Hess rather than an asset sale.
“We believe we have the correct interpretation of this contract,” Wirth said.
The dispute has already delayed Chevron’s acquisition of Hess, threatening to leave the oil giant in strategic limbo for months or longer. The transaction still requires approval from the US Federal Trade Commission through a separate process. The discovery of 11 billion barrels of oil reserves by Exxon in Guyana is a key driver of the stock’s outperformance compared to rivals over the past three years. The Hess deal will help Chevron close that gap.
Wirth indicated that there are no parallel talks currently underway with Exxon. Arbitration proceedings are governed by the International Chamber of Commerce.
“We were in talks before the arbitration process began, and Hayes has been in talks with other members of this joint-operations agreement in an effort to understand their concerns,” Wirth said. Arbitration actually ended those discussions. Time, and that’s the path we’re on today.”
More stories like this are available on Bloomberg.com
©2024 Bloomberg L.P.
Unlock a world of benefits! From informative newsletters to real-time stock tracking, breaking news and personalized newsfeeds – it’s all here, just a click away! log in now!
Watch all business news, market news, breaking news events and latest news updates on Live Mint. Download Mint News app to get daily market updates.
more less
Published: April 30, 2024, 01:28 am IST