Big Oil Battle: ExxonMobil and Chevron Are Fighting Over This Oil-Rich Spot

Core Viewpoint - ExxonMobil and Chevron are in a competitive dispute over Chevron's acquisition of Hess, with Exxon aiming to secure Hess' valuable assets, particularly in Guyana, to prevent them from falling into Chevron's hands [1][9]. Group 1: Acquisition Details - Chevron's acquisition of Hess is valued at $53 billion, or $60 billion including debt, announced shortly after Exxon's $59.5 billion deal for Pioneer Natural Resources [2]. - The acquisition is expected to enhance Chevron's resource portfolio by adding the Stabroek block in Guyana, which is noted for its high cash margins and low carbon intensity [3]. Group 2: Production and Financial Impact - The merger is projected to enable Chevron to grow production and free cash flow faster than its current five-year guidance, potentially doubling free cash flow by 2027, assuming $70 oil [4]. - The Stabroek block is anticipated to increase output to approximately 1.3 million barrels per day by 2027, tripling production from the previous year, contributing significantly to Chevron's valuation of the deal [6]. Group 3: Legal and Strategic Implications - A joint development agreement for the Stabroek block includes a change of control provision, which Exxon believes is triggered by Chevron's acquisition of Hess, leading to arbitration between the companies [5]. - If Exxon prevails in arbitration, it may pursue Hess' stake in the Guyana development, while a Chevron victory would solidify its position and growth potential in the oil sector [7][9].