Key Points
- An arbitration panel ruled in favor of Hess, allowing Chevron’s $53 billion acquisition to proceed.
- The ruling resolves a dispute with Exxon Mobil over a “right of first refusal” for Hess’s stake in a Guyana oil field.
- The panel agreed that the right did not apply to the sale of the entire Hess company.
- The decision ends more than 20 months of uncertainty that had threatened to kill the deal.
Chevron’s massive $53 billion acquisition of Hess Corp. can finally move forward after an arbitration panel ruled in favor of Hess in its dispute with rival oil giant Exxon Mobil.
The decision from the International Chamber of Commerce ends a period of major uncertainty for the deal, which was first announced over 20 months ago. The conflict centered on Exxon’s claim that it had the “right of first refusal” to buy Hess’s valuable stake in the Stabroek oil block in Guyana, a field where Exxon is also a partner.
Hess and Chevron successfully argued that this right did not apply in this situation. They contended that the clause was only applicable to the sale of Hess’s specific stake in the oil field, not to the sale of the entire Hess company. The arbitration panel agreed with their argument.
The ruling is a significant victory for Chevron. The long dispute had cast a shadow over the company’s stock price and raised questions about the deal’s future. Chevron CEO Mike Wirth had previously stated that he would abandon the acquisition entirely if they lost the arbitration case.
With this major legal hurdle now cleared, Chevron’s path is open to complete one of the largest energy deals in recent years.
