Chevron acquisition of Hess confronts challenges amid ExxonMobil, CNOOC protective rights
Date
5/28/2024 4:22:37 AM
(MENAFN) In the wake of Chevron's recent USD53 billion Acquisition of Hess Oil Company in Guyana, Mike Wirth, CEO of Chevron, reached out to his counterpart at ExxonMobil, Darren Woods, to discuss potential future collaborations. The substantial deal grants Chevron a stake in a major oil project in Guyana, which is a venture involving ExxonMobil and Hess. According to a report, Woods expressed enthusiasm for this cooperation, highlighting that Exxon and Hess hold interests in a significant reserve of 11 billion barrels of oil and gas located off the coast of South America.
During a phone conversation last October, Woods emphasized the long-standing partnership between ExxonMobil and Chevron in various global projects, suggesting that this partnership could further extend to the burgeoning opportunities in Guyana. Despite the optimistic outlook, the situation soon turned contentious, threatening the stability of Chevron's massive acquisition of Hess.
The report conveyed that Exxon officials, alongside the Chinese company CNOOC, which is the third partner in the project, asserted their rights to a "preemptive takeover offer" and a "right of initial refusal." These provisions enable Exxon and CNOOC to counter Chevron's acquisition bid by either rejecting the offer outright or submitting a competing bid that matches Chevron's terms. This unexpected stipulation caught Chevron officials off guard and led to a series of private negotiations with Hess, which ultimately failed to resolve the dispute.
The emerging conflict between these oil giants underscores the complexities of major acquisitions in the energy sector, where preexisting agreements and partnerships can significantly influence the outcomes of such deals. The resolution of this issue will be crucial for Chevron as it navigates its future strategy and operations in Guyana's lucrative oil fields.
MENAFN28052024000045015682ID1108264511
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.