The US Federal Trade Commission plans to authorize the acquisition of the American oil company Hess Corp. the energy company Chevron Corp. for $53 billion. This is reported by foreign media.
At the same time In any case, Chevron will have to win arbitration proceedings with Exxon Mobil Corp. to close the deal. Hess's largest asset is a stake in a huge oil field in Guyana, and Exxon claims that it has a pre-emptive right to purchase.
The total value of the transaction, including debt obligations, is $60 billion ($171 per share) and will be financed by issuing shares with a ratio of 1.0250 Chevron shares for each Hess share.
The deal will increase Chevron's share to 30% in the market of Guyana, which is one of the world's new oil exporters, as well as achieve faster production growth and increase the area of fields under development in the Gulf of Mexico and the Bakken shale basin in the United States.
The proposed takeover of Hess by Chevron will be one of the largest oil deals in recent years. Delays in closing the deal have left both Chevron and Hess in strategic limbo.
In May 2024, Hess Corp. received the necessary approval from shareholders to complete the merger with Chevron Corp. at an extraordinary meeting.
At the same time, the transaction does not require approval by Chevron shareholders, but depends on a decision in the framework of arbitration proceedings regarding the pre-emptive rights for the joint development of the Stabroek Block field on the continental shelf of Guyana worth more than $150 billion.
In August 2024, the completion of the deal between Chevron and Hess was postponed due to the postponement of the meeting of the international arbitration court to settle the ownership dispute with Exxon Mobil Corp. for May 2025.
From Chevron's point of view, the right of first refusal provision does not apply to a corporate merger, and the claims of Exxon and China National Offshore Oil Corp. (CNOOC) jeopardize the agreement that was concluded between Chevron and Hess in October 2023 in order to strengthen positions in Guyana's offshore oil assets.
Morgan Stanley & Co. LLC acts as financial advisor, and Evercore acts as Chevron's legal advisor. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are advisers to Hess.
The Stabroek Unit in Guyana is a unique asset with high profitability and low carbon intensity. Stabroek is the world's second largest area in terms of undiscovered oil reserves, with resources estimated at 11 billion barrels of oil equivalent. The project is being developed by a consortium led by ExxonMobil (45%), China's CNOOC owns 25%, and Hess owns 30%.
Chevron Corp. — an American integrated energy company and one of the largest corporations in the world. Chevron produces crude oil and natural gas, as well as produces transportation fuels, lubricants, petrochemical products and develops new low-carbon activities in the field of renewable fuels, hydrogen, carbon capture and other innovative technologies. The main fields developed by the company are located in the USA (29%), Australia (20%) and Kazakhstan (18%). The headquarters is located in San Ramon (California).
Hess is an independent American oil company headquartered in New York (USA). The company is engaged in the exploration and production of crude oil and natural gas and is a key producer on the shelf of Guyana, the Bakken shale field in North Dakota (USA), as well as on the shelves of the Gulf of Mexico and the Gulf of Thailand.
Exxon is one of the largest oil companies in the world. The main oil reserves are located in Asia and the USA, natural gas — in the USA, Australia, Asia and Europe. Exxon was created as part of the merger of the largest American oil companies Exxon and Mobil in 1999. The headquarters is located in Irving (Texas).
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