ExxonMobil CEO Darren Woods has clarified the company is seeking to assert its rights rather than attempting to purchase Hess in the ongoing dispute over the latter’s assets in Guyana, reported Reuters.
This marks Woods’ first public commentary on the arbitration case that could affect Chevron‘s $53bn bid for Hess.
Exxon, which currently holds a 45% stake in the Stabroek block offshore Guyana, is not looking to acquire Hess outright, according to Woods.
Speaking to the publication at the CERAWeek energy conference in Houston, Exxon’s chief said: “We are basically standing up for what we believe is a fundamental right.”
Exxon is trying to “secure and confirm the rights in that contract gives the existing partners”.
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The focus is on establishing whether Exxon has preferential rights over Hess’ 30% share in the block, a significant part of Chevron’s acquisition target.
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By GlobalDataCNOOC (China National Offshore Oil Corporation) Petroleum Guyana owns the remaining 25% stake.
Earlier this month, Exxon initiated arbitration proceedings to assert its pre-emption rights over the oilfield.
The Stabroek block is a coveted asset, expected to yield more than 1.2 million barrels of oil and gas per day by 2027.
Hess and Chevron have expressed their disagreement with Exxon’s interpretation of the terms of the joint operating agreement, which Exxon argues contains a right of first refusal and which governs the consortium in charge of all oil production in Guyana. Public access to the document is not available.
The uncertainty has led Hess to cast doubt on the deal’s projected mid-2024 closure.
Should Exxon affirm its preferential rights, the next steps would involve assessing the value of Hess’ assets with its partners and determining the viability of increasing its stake to 75%.
Woods emphasised that acquiring Hess’ share would be the final move in a three-stage process.
“We have got to get past the first hurdle, which is an alignment, an agreement that a preemption right exists in the contract,” Woods noted.
The CEO left open the possibility of an offer for some or all of Hess’ stake.
A Chevron spokesperson did not respond to requests for comment on the Exxon CEO’s statements.
