Stabroek Block operator, ExxonMobil has initiated arbitration proceedings against Hess Corporation’s proposed sale of its Guyana oil properties, potentially endangering Chevron’s ambitious $53 billion acquisition plans.
Exxon has thus far revealed that such a move will safeguard its interests, asserting that the arbitration case aims to preserve its right to acquire Hess’s 30 percent stake in the Stabroek Block.
Reports surfaced this morning, stating that Senior Vice President of Exxon, Neil Chapman while speaking at a conference, underscored Exxon’s commitment to exploring its options and assessing the value proposition presented by Hess’s stake. He reiterated the company’s ongoing negotiations with Chevron and Hess, highlighting the failure to reach a consensus on the terms of its right of first refusal, which prompted the formal filing with the International Chamber of Commerce.
The dispute, which has rattled the energy market in recent weeks, revolves around conflicting interpretations of preemptive rights under the joint operating agreement governing the Stabroek Block consortium. Exxon holds a 45 percent stake alongside CNOOC’s 25 percent and Hess’ 30 percent.
Vice President Dr. Bharrat Jagdeo’s last week said the Government of Guyana will be staying out of the issue, affirming that Chevron’s acquisition of Hess would not necessitate Guyana’s approval.
The implications of this dispute extend beyond the involved parties, with analysts closely monitoring potential outcomes, including financial settlements and the prospect of arbitration. Against the backdrop of market turbulence, characterized by fluctuations in Hess and Chevron’s stock prices, the stakes are undeniably high, given the strategic significance of Guyana’s Stabroek Block and its vast oil reserves.
