Chevron CEO says ExxonMobil discussions over prolific oil field offshore Guyana “ended abruptly”

Kevin Crowley, Bloomberg March 19, 2024

(Bloomberg) – Chevron Corp.’s discussions with Exxon Mobil Corp. and China’s Cnooc Ltd. over a prolific oil field off the shores of Guyana ended “abruptly” a few weeks ago, Chief Executive Officer Mike Wirth said.

Mike Wirth speaks during the 2024 CERAWeek by S&P Global conference in Houston, Texas, on March 19. (Photographer: Aaron M. Sprecher/Bloomberg)

Chevron held constructive talks with Exxon and Cnooc over the Stabroek block off Guyana several months ago as part its proposed $53 billion takeover of Hess, which owns 30% of the development, Wirth said at the CERAWeek by S&P Global conference in Houston Tuesday.

“We tried to help them address the issues they had raised and achieve the objectives they had communicated to us,” Wirth said. “We were surprised when they a couple of weeks ago abruptly ended those discussions and publicly announced they had filed for arbitration.”

Exxon, which operates the Guyana project, filed for arbitration at the International Chamber of Commerce in Paris earlier this month, arguing that it has a right of first refusal over Hess’s stake. Exxon Chief Executive Officer Darren Woods said yesterday he has no intention of buying Hess in its entirety but wants to preserve the company’s rights under the contract with a view to establishing the stake’s value and potentially bidding for it in the future.

Woods also said in an interview Monday that he is still open to discussions with Chevron over the deal.

Chevron believes its deal to buy Hess does not trigger the right of first refusal clause contained in Guyana’s joint operating agreement because the deal is for the company as a whole, not just the Stabroek stake. The agreement, written by Exxon more than a decade ago, is confidential.

Chevron, Hess and their lawyers did “extensive due diligence” on the contract, Wirth said.

“We have extensive experience with these types of contracts around the world,” he said. “We were made very confident in our understanding of the language and look forward to seeing it affirmed at arbitration.”

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