Daily Newsletter

27 February 2024

Daily Newsletter

27 February 2024

Exxon, CNOOC consider exercising right to buy Hess’ Guyana assets 

This move could disrupt Chevron's plans to buy stake in the Stabroek block through the $53bn acquisition of Hess. 

Shivam Mishra February 27 2024

ExxonMobil and China National Offshore Oil Corporation (CNOOC) are considering exercising their rights to acquire Hess' stake in the Stabroek block offshore Guyana. 

This move could potentially disrupt Chevron's plans to buy into the Stabroek block through the $53bn acquisition of Hess.  

In a statement cited by Bloomberg, Exxon said: “We owe it to our investors and partners to consider our pre-emption rights in place under our Joint Operating Agreement to ensure we preserve our right to realise the significant value we have created and are entitled to in the Guyana asset.” 

Exxon, the operator of the Stabroek block, has been a key player in the region since its first significant oil discovery in Guyanese waters in 2015.  

The company has identified 11 billion barrels of reserves and expects to double production to 1.2 million barrels per day by 2027. 

Currently, ExxonMobil Guyana operates the block with a 45% interest, while Hess Guyana Exploration and CNOOC Petroleum Guyana own 30% and 25%, respectively.   

The emerging basin's significance is highlighted by the dispute over the Stabroek block, as it becomes increasingly vital to global crude markets.  

Oil majors are actively seeking to secure stakes in proven reserves to avoid the development of new projects that would add to the global supply. 

In a stock filing, Chevron disclosed ongoing discussions with Exxon Mobil and CNOOC regarding a right of first refusal provision for the Stabroek block.  

Chevron believes that the Stabroek right of first refusal does not apply to the merger with Hess due to the structure of the deal. 

It expects that “these discussions will result in an outcome that will not delay, impede or prevent the consummation of the merger”. 

However, Chevron said: “If these discussions do not result in an acceptable resolution and arbitration (if pursued) does not result in a confirmation that such right of first refusal provision is inapplicable to the merger, then there would be a failure of a closing condition under the merger agreement, in which case the merger would not close.” 

In November 2023, Exxon and its partners commenced production at the Payara field within the Stabroek block.  

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