A Series Of Uncommon Events Threatens Chevron Buyout Of Hess

ExxonMobil took the step of filing for arbitration before the International Chamber of Commerce in Paris Wednesday to secure its claim to pre-emption rights in the prolific Stabroek field offshore Guyana, where it serves as operator. The move creates uncertainty over Chevron’s plans to acquire Houston-based Hess Corp. and its 30% interest in the development.

Speaking at a conference, ExxonMobil senior vice-president Neil Chapman was quoted by Bloomberg as telling attendees, “We understand the intent of this language of the whole contract because we wrote it,” adding, “The Chevron-Hess transaction, what it really did, is it attempted to circumvent the commercial purpose” of the agreement.

ExxonMobil’s desire to protect its pre-emptive rights related to Stabroek became public in late February when Chevron filed public notice of ongoing discussions between itself, ExxonMobil and Hess. At that time, Chevron spokesman Braden Reddal expressed confidence in his company’s position, saying, “As described in the S-4, there is no possible scenario in which Exxon or CNOOC could acquire Hess’ interest in Guyana as a result of the Chevron-Hess transaction.”