DStv Channel 403 Friday, 19 April 2024

Chevron's $53bn Hess buyout threatened by rival oil giants

WASHINGTON - Chevron disclosed on Monday that its proposed $53-billion acquisition of fellow American firm Hess could be at risk if the control of a key oil asset is successfully challenged by rival petroleum giants.

Chevron acknowledged in a securities filing that there is a scenario where Hess "would remain an independent company," while adding it does not believe "there is any material likelihood" of such an outcome.

The issue concerns Hess's 30 percent stake in the Stabroek Block offshore Guyana, a mammoth oilfield that was a driver of the takeover.

Stabroek isĀ operated by US giant ExxonMobil, which has a 45 percent stake. Chinese company Cnooc holds the remaining 25 percent of the project.

The existing operating agreement has a provision that allows existing partners -- ExxonMobil and Cnooc -- a "right of first refusal" to purchase the Guyana asset.

Chevron and Hess, both American multinational energy firms, do not believe the right applies "due to the structure of the merger" and the language of the Stabroek partnership, said the Chevron filing.

However, after the Chevron-Hess agreement was announced in October, ExxonMobil and Cnooc notified Chevron that they disagreed.

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