ExxonMobil's (XOM) Right of Refusal Halts Chevron-Hess Deal

Core Viewpoint - Exxon Mobil Corporation's ongoing arbitration regarding its right of first refusal on Hess Corporation's Guyana operations is significantly delaying Chevron's $53 billion acquisition of Hess [1]. Group 1: Arbitration and Stakeholder Impact - The arbitration panel's incompleteness has stalled a decision on ExxonMobil's right of first refusal over Hess' Guyana operations, which is critical for Chevron's acquisition [1]. - The arbitration process has been delayed for three months, with Hess projecting a resolution by the end of 2024, while ExxonMobil expects the dispute to extend into 2025 [2]. - The International Chamber of Commerce, overseeing the arbitration, has not provided a timeline for appointing the third arbitrator or the decision process [2]. Group 2: Financial and Operational Context - The sale involves a 30% stake in a Guyana oil consortium that has discovered at least 11 billion barrels of oil and expects to produce 1.3 million barrels per day by 2027 [1]. - ExxonMobil holds a 45% majority stake in the consortium and claims that Chevron's acquisition circumvents its preemption right as specified in the joint operating agreement (JOA) [1]. - Despite Hess shareholders approving the sale by a slim 51% majority, the U.S. Federal Trade Commission has yet to address antitrust issues, complicating the situation further [2]. Group 3: Valuation and Market Reactions - Chevron argues that ExxonMobil's right of first refusal does not apply to the entire sale of Hess, and differing valuations of the Guyana assets could influence the arbitration's outcome [3]. - Market stakeholders are left anticipating a swift resolution to this high-stakes dispute, as the arbitration panel remains incomplete [3].