Arbitrators reported to have reached decision in ExxonMobil, Hess dispute

The arbitrators in a legal dispute between ExxonMobil and Hess have reportedly reached a decision. Citing two sources familiar with the matter, Reuters reported last week that the International Chamber of Commerce, which is overseeing the arbitration case, was now reviewing the decision before it is released to the parties involved.

The decision will determine whether Chevron can proceed with is planned $53bn acquisition of Hess, which has been stalled as a result of the dispute. At issue is Hess’ 30% stake in Guyana’s Stabroek block, which is operated by ExxonMobil with a 45% interest, while China’s CNOOC International holds the remaining 25%. ExxonMobil and CNOOC have argued that they have a right of first refusal to buy Hess’ stake in the block, while Hess and Chevron have pushed back, claiming that the clause does not apply to the sale of Hess as a whole.

According to Hess’ website, gross discovered recoverable resources for the Stabroek Block are estimated at more than 11bn barrels of oil equivalent (boe) with further exploration potential thought to be in the billions of barrels as well. As a result, Hess’ Stabroek stake is the main attraction for Chevron, with the supermajor aiming to use the acquisition to replenish its declining oil and gas reserves. Chevron said earlier this year that its reserve replacement ratio was -4% for 2024. This represented the company’s oil and gas reserves having fallen to the lowest point in at least a decade, according to Reuters.

No details have yet emerged on what the decision in the arbitration case is likely to be or when it will be released. However, Reuters said in a separate report this week, citing two sources familiar with the matter and an industry analyst, that Chevron was laying the groundwork for a swift closing of the Hess acquisition.

According to an internal organisational chart seen by Reuters, Chevron has assigned roles in its information technology team to work on the Hess integration. A severance programme is also reportedly being prepared for Hess employees that do not wish to stay with the company following the closing of the merger.