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Chevron (NYSE:CVX) is clear to proceed with its planned $53B acquisition of Hess (NYSE:HES) after an arbitration panel dismissed Exxon Mobil’s (NYSE:XOM) claim that it had a contractual right to bid for Hess’ assets offshore Guyana.
The ruling handed down Friday from the International Chamber of Commerce in Paris resolved the bitter dispute between the oil giants over the prolific Stabroek block off the coast of Guyana that holds more than 11B barrels of oil, a source of growth Chevron (NYSE:CVX) needs to help turn around its lagging performance.
Hess (NYSE:HES) +6.8%, Chevron (NYSE:CVX) +2.9%, and Exxon (XOM) -0.3% pre-market.
Chevron (CVX) plans to move swiftly to close the Hess (NYSE:HES) deal, which it had originally struck in October 2023.
Exxon (XOM) said it disagrees with the arbitration panel’s ruling but respects the dispute resolution process.
Exxon (XOM), which operates the Stabroek block with a 45% interest, and China’s CNOOC (OTCPK:CEOHF), which holds 25%, filed arbitration claims against their partner Hess (HES) last year, arguing they had a contractual right-of-first-refusal to buy Hess’ 30% interest in the venture; Chevron (CVX) and Hess claimed the pre-emptive right did not apply to the sale of the entire Hess company.
The fight showed the value of the Stabroek block, which drove profits for the Exxon-led (XOM) consortium that controls all of its oil production and transformed Guyana into one of the world’s fastest growing economies.