CNOOC & ExxonMobil (XOM) Challenge Chevron’s Acquisition Of Guyana

(CTN News) – ExxonMobil Corporation XOM and China National Offshore Oil Corporation (“CNOOC”) have merged their arbitration claims against Chevron Corporation CVX’s proposed takeover of Hess Corporation’s HES stake in the most prolific oil block offshore Guyana.

Following a recent application, their arbitration claims have been consolidated, signaling a significant escalation in the struggle for control of lucrative oil reserves in the region.

The unified arbitration was approved following an application filed on Mar 26 by Hess to its shareholders, which was included in a regulatory filing by Chevron on Thursday.

Despite the fact that both ExxonMobil and CNOOC hold substantial 70% stakes in the Stabroek Block, they argue that they are entitled to preempt Hess’ interests.

However, Chevron and Hess remain steadfast in their dismissal of these claims, stating in the filing that they do not believe ExxonMobil and CNOOC’s assertions to be substantiated. Hess has stated that it intends to vigorously defend its position in the arbitration proceedings.

It expresses confidence that the arbitral tribunal will rule in its favor. According to the company, the Stabroek right of first refusal clause does not extend to the proposed merger.

The dispute stems from a contract drafted more than a decade ago, representing an unprecedented challenge in major oil companies’ contemporary history.

In the wake of the complicated legal maneuvers and contractual interpretations involved in the $53 billion Chevron-Hess deal, the deal hangs in the balance.

Hess highlighted the intrigue surrounding the situation in the filing by pointing out that ExxonMobil had expressed support for the transaction in October but reversed its position six months later. A contentious dispute has been further complicated by this sudden reversal.

It is important to note that Hess’ position is grounded firmly in the explicit terms of the Stabroek contract. Chevron and Hess have been accused by ExxonMobil of attempting to circumvent the private contract.

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