Chevron's $53 billion deal for Hess faces new delay over arbitration schedule

Reuters

Chevron's $53 billion deal for Hess faces new delay over arbitration schedule

2024 7월 31, 오후 9:39 GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>UPDATE 2-Chevron's $53 billion deal for Hess faces new delay over arbitration schedule</title></head><body>

Exxon claims right of first refusal to Hess asset sale

Arbitrators' ruling may fall into second-half of 2025

Chevron, Hess 'confident' merger will still go ahead

Adds Chevron and Exxon comments, background, paragraphs 4-11

By Gary McWilliams

HOUSTON, July 31 (Reuters) -Chevron Corp's CVX.N proposed purchase of oil producer Hess HES.N faces a lengthy new delay, with an arbitration panel not expected to hear a rival's claim to Hess' stake in a Guyana oil-producing joint venture until May 2025, the company said on Wednesday.

Exxon Mobil XOM.N and partner CNOOC Ltd 0883.HK filed arbitration claims claiming a pre-emption right to any sale of Hess’ lucrative stake in the Guyana oil-producing joint venture, a move that threatened to block Chevron’s biggest deal in more than two decades.

Hess last October agreed to sell itself to rival Chevron in a $53 billion deal that would give Chevron a 30% stake in the consortium that controls all of Guyana’s oil production. Exxon leads the consortium with a 45% stake.

"Chevron and Hess had expected and requested that this hearing be held earlier, but the arbitrators’ common schedules did not make this possible," a Chevron spokesman said in a statement.

"Exxon and CNOOC continue to ignore the plain language of the operating agreement, and Chevron and Hess remain confident that the arbitration will confirm that the Stabroek ROFR does not apply to the Merger."

Chevron and Hess remain committed to the merger and look forward to combining the two companies, the spokesman added.

"We appreciate the arbitration panel giving this issue the due consideration it deserves," an Exxon spokesperson said. "This matter is too important to rush through - all relevant facts and circumstances must be taken into consideration, and this will take time."

Hess did not immediately reply to a request for comment.

HESS, CHEVRON SHARES FALL

The lengthy delay puts new strains on Chevron and Hess investors. In April, Hess had said it wanted the case to be heard by the third quarter and the arbitration completed by year-end.

Hess shares were down 2.5% in after-hours trading after closing at $153.42 during the regular session. Chevron shares were down less than 1% in after-hours trading after closing at $160.47.

Exxon has argued a right of first refusal clause in its Guyana joint operating agreement with partners Hess and CNOOC was triggered by the Chevron bid. Chevron and Hess dispute that claim.

Reporting by Gary McWilliams in Houston
Editing by Matthew Lewis

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Chevron's $53 billion deal for Hess faces new delay over arbitration schedule

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