Both Chevron and Hess are optimistic that the arbitration process initiated by ExxonMobil and CNOOC International concerning the Stabroek block offshore Guyana will conclude by the end of 2024.
This is according to a filing with the US Securities and Exchange Commission (SEC) where Chevron and Hess anticipated securing the necessary shareholder and regulatory approvals for their US$53 billion merger by mid-2024. However, the companies noted the ongoing arbitration cases could potentially delay the transaction.
“Hess is seeking to have the merits of the arbitration heard by the third quarter of 2024 and to complete the arbitration by the end of 2024”, the company added.
Further, Hess said it aims to have the arbitration proceedings resolved by the third quarter of 2024 and completed by the year’s end. Originally slated for completion by October 2024, Chevron and Hess have agreed to extend the merger timeline by a year if the Stabroek arbitration persists.
ExxonMobil and CNOOC have raised arbitration challenges related to their rights of first refusal to Hess’ share of the Stabroek asset, crucial to the Chevron-Hess merger. The arbitration proceedings of both companies were consolidated into a single case on March 26, as per SEC filings.
Despite the arbitration uncertainties, Chevron CEO Mike Wirth remains confident in closing the transaction, albeit acknowledging potential delays due to arbitration. Wirth emphasized ongoing collaboration with the Federal Trade Commission to address their concerns.
“It looks like it will take a little bit more time now, because the arbitration may become the rate-defining factor”, Wirth said. He added, “We’re working closely with the (Federal Trade Commission) to satisfy their concerns.”
