By Sabrina Valle
In a high-profile clash between Exxon Mobil and Chevron, an arbitration panel will determine the true value of Hess’s oil assets in Guyana, sources reveal.
Chevron’s $53 billion bid for Hess last October sparked the largest wave of consolidation in the oil industry in decades. The most sought-after asset in this deal is Hess’s stake in a Guyana field operated by rival Exxon.
Exxon and China’s CNOOC are challenging the deal, claiming a contractual right to buy Hess’s stake. The arbitration panel’s decision will be crucial in this dispute.
Valuation is key in change of control disputes, with the prize being Hess’s 30% stake in the Stabroek offshore Guyana joint venture, which holds over 11.6 billion barrels of oil and gas.
Exxon CEO Darren Woods is considering a counterbid for Hess’s stake, pending the arbitration panel’s decision. Wall Street analysts estimate that Hess Guyana represents a significant portion of Chevron’s bid.
Chevron CEO Michael Wirth remains confident in the outcome of the arbitration, dismissing any chance of compromise with Exxon and CNOOC.
Chevron’s profits have fallen in recent quarters, and the delay in closing the deal with Hess could impact its ability to realize cost savings and synergies.
If the valuation proves to be higher than expected, it could make a counterbid more expensive for Exxon, adding further uncertainty to the situation.
Overall, this arbitration case will have significant implications for both Exxon and Chevron, potentially affecting their financial standings and future strategies in the oil industry.
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