HOUSTON, (Reuters) – U.S. energy major Exxon Mobil’s (XOM.N) arbitration case that could block Chevron’s purchase of Hess will extend into 2025, Exxon CEO Darren Woods said in an interview on CNBC yesterday, ahead of a coming vote by Hess shareholders on the deal.
Exxon and CNOOC Ltd filed cases before the International Chamber of Commerce in March, seeking a right-of-first-refusal over any sale of Hess’s 30% stake in the Stabroek offshore oil block in Guyana, where the three companies control the largest oil discovery in nearly a decade.
Hess has set May 28 for a shareholder vote on the $53 billion all-stock deal that would give Chevron a major stake in Guyana’s lucrative offshore oil fields, which to date have been shown to hold more than 11 billion barrels of oil and gas resources.
Exxon would prefer to slow the deal closing to gain time to consider whether it wants to bid for Hess, Roy Behren, co-president of the New York investment firm West-chester Capital Manage-ment and a large Hess shareholder, said in an interview.
Westchester Capital expects to vote its 2 million Hess shares in favour of the Chevron deal unless a higher bid materializes, Behren said.
Exxon has said it was not planning to bid for Hess but could consider a larger stake in the Guyana joint venture.
“Exxon would probably like to see a shareholder vote not take place because it is one more of the dominos needed for the transaction to be completed,” Behren said yesterday. “They want shareholders to be not comfortable with the assumption that this is a cake walk for Chevron.”
The source added that discussions are internal and preliminary at this stage and may not result in an approach.
Woods comments present a later timeline for a decision on its claims and for when the Chevron deal could close. Previously, Hess said it sought to have the case heard by the third quarter and completed by year-end.
Chevron CEO Michael Wirth separately told CNBC the company is working toward U.S. Federal Trade Commission approval and the Hess shareholder vote.
Hess did not reply requests for comment.
An Exxon spokesperson said the 2025 arbitration timeline was not new and did not comment on the shareholder remarks on any impact on the Hess shareholder vote.
U.S. antitrust regulators have not yet approved the Chevron-Hess deal. The U.S. FTC last week consented to Exxon’s $60 billion all-stock purchase of top U.S. shale oil producer Pioneer Natural Resources.
Exxon has claimed it holds a right of first refusal over any change of control in Hess’s Guyana properties as part of the Stabroek consortium’s operating agreement. Hess and Chevron have said they believe a right does not apply to the sale of the entire company.