CVX

Chevron, Exxon in dispute over Hess stake in Guyana oil block

Credit: REUTERS/MIKE BLAKE

By Sabrina Valle

HOUSTON, Feb 26 (Reuters) - Chevron Corp CVX.N on Monday said it was in talks with Exxon Mobil Corp XOM.N and China's CNOOC 0883.HK over whether the two have a right of first refusal to acquire Hess Corp.'s stake in the Stabroek oil block in Guyana.

Last October, Chevron agreed to buy Hess Corp HES.N for $53 billion largely to obtain its 30% share of the prolific block, which has at least 11 billion barrels of oil. Failure to reach agreement could disrupt the Hess acquisition, Chevron said in a securities filing.

"Chevron and Hess believe these discussions will result in an outcome that will not delay, impede or prevent the consummation of the merger," the No. 2 U.S. oil firm said in its filing. However, the dispute could go to arbitration if the talks do not result in a settlement, it added.

Hess shares fell nearly 3% in late trading.

Exxon confirmed the talks in a statement, adding it intends to "preserve our right to realize the significant value we’ve created and are entitled to in the Guyana asset."The company is "working closely with the Guyanese government to ensure their rights and privileges."

Chevron did not immediately reply to a request for comment.

The pending acquisition of Hess would give Chevron a 30% stake in the Stabroek offshore oil block in Guyana. The U.S. Federal Trade Commission has sought additional information on the merger, which has delayed any closing to at least the middle of this year.

The Exxon-led consortium has said it expects to triple Guyana's oil output to more than 1.2 million barrels of oil per day by 2027.

(Reporting by Sabrina Valle in Houston; Editing by David Gregorio)

((sabrina.valle@thomsonreuters.com; +1 832 610 7346; Twitter: @ArathySom;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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