ExxonMobil CEO Darren Woods has stated that the US supermajor has no intention of buying Hess from under Chevron’s nose but rather wants to establish its rights over Hess’s Guyana assets.
Woods told reporters during the CERAWeek energy conference in Houston that it would not have waited for Chevron to announce its $53bn deal to buy Hess if it had any interest in buying it.
Hess and Exxon have a joint operating agreement that governs the relations of consortium members for all of Guyana’s oil production. Exxon believes it has the right of first refusal in case of such a takeover while Hess and Chevron disagree.
However, Exxon could acquire Hess’ entire 30% share in the giant Stabroek block offshore Guyana in which it currently holds a 45% stake. The third partner in the block is China’s CNOOC.
This means that Hess owns almost a third of over 11bn barrels of oil equivalent discovered in the block. Collectively, over $40 billion worth of investments have been sanctioned for development.
Hess’ Guyana stake is Chevron’s main target as Stabroek is the largest oil discovery in almost two decades and is expected to produce more than 1.2m barrels of oil and gas per day by 2027.
Woods added that Exxon wants to establish that it holds preferential rights over Hess’ Guyana asset and then determine its value with partners before considering buying it.
The timing for the final resolution of Hess’ Gutana assets is unknown as such arbitration cases could last five to six months and it will provide more time for Exxon to prevent the sale of Hess’ Guyana assets to Chevron.
The Chevron-Hess deal was already slowed down by the US Federal Trade Commission which is asking for more information on the merger meaning that even without Exxon’s arbitration the closing of the buy would not happen before the middle of the year.
But even with the dispute over Hess’ assets, the trio of Exxon, Hess, and CNOOC can do no wrong in the Stabroek block as they announced another discovery last Friday. The latest discovery, named Bluefin and drilled by the Stena Drillmax drillship, has become one of over 30 discoveries made on the block since 2015.
