Chevron Corp. CEO Mike Wirth emphasized that the California company’s plan to acquire Hess Corp., and specifically its 30% interest in the Guyana offshore Stabroek Block, was an "important” deal at CERAWeek by S&P Global on March 19 in Houston.
“Number one, this transaction is an important one. It’s good for Chevron shareholders, it’s good for Hess shareholders, it’s good for the country of Guyana. I think it’s good for U.S. energy security, good for the industry,” Wirth said during a plenary session with S&P Global Vice Chairman Daniel Yergin.
For the record, Wirth said, his company has long sought to discuss the terms around Hess’ interest in Stabroek with both of the block’s partners, operator Exxon Mobil Corp. and China National Offshore Oil Corp. (CNOOC).
“We have worked hard to engage the Stabroek Block partners privately and constructively for several months. We tried to help them address the issues that they had raised and achieve the objectives that they had communicated to us,” Wirth said, responding to a question from Yergin about comments a day earlier from Exxon Mobil skipper Darren Woods on the same topic.
“We were surprised when a couple of weeks ago [they] abruptly ended those discussions and publicly announced that they had filed for arbitration,” Wirth said.
Chevron recently announced plans to acquire Hess in a $53 billion all-stock deal. The dispute at hand revolves around Hess’ 30% interest in Stabroek. Both Exxon and CNOOC have expressed that they believe they have a right of first refusal over it.
In terms of doubts around Exxon’s intention to pay a premium above the premium Chevron will ultimately pay for Hess, Woods downplayed that hype and said his company had no interest in acquiring Hess.
For his part, Wirth said: “We did extensive diligence on the current operating agreement and have extensive experience with these types of agreements around the world, as does Hess, and we remain very confident in our understanding of the language and look forward to seeing the firms in arbitration.”
Recommended Reading
E&P Earnings Season Proves Up Stronger Efficiencies, Profits
2024-04-04 - The 2024 outlook for E&Ps largely surprises to the upside with conservative budgets and steady volumes.
U.S. Shale-catters to IPO Australian Shale Explorer on NYSE
2024-05-04 - Tamboran Resources Corp. is majority owned by Permian wildcatter Bryan Sheffield and chaired by Haynesville and Eagle Ford discovery co-leader Dick Stoneburner.
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
Endeavor Integration Brings Capital Efficiency, Durability to Diamondback
2024-02-22 - The combined Diamondback-Endeavor deal is expected to realize $3 billion in synergies and have 12 years of sub-$40/bbl breakeven inventory.
President: Financial Debt for Mexico's Pemex Totaled $106.8B End of 2023
2024-02-21 - President Andres Manuel Lopez Obrador revealed the debt data in a chart from a presentation on Pemex at a government press conference.