Hess arbitration-merits decision on Guyana block expected mid-2025

The arbitration-merits hearing over rights related to Stabroek block offshore Guyana involving Hess Guyana Exploration Ltd. and affiliates of Exxon Mobil Corp. and China National Offshore Oil Corp. (CNOOC) will begin in May 2025 with a decision expected in the following three months.

Official timeline details were released in filings to the US Securities and Exchange Commission by Chevron Corp. and Hess Corp. on July 31.

At issue are differing interpretations of what a right-of-first-refusal provision means given Chevron’s plans to acquire Hess (OGJ Online, Mar. 29, 2024). In October 2023, Chevron and Hess agreed to a $53-billion deal that Chevron believes gives it rights to Hess’ 30% non-operated interest in the 6.6-million-acre Stabroek block where reserves are estimated at 11 billion bbl. ExxonMobil operates the block and owns 45% of the consortium developing it, with CNOOC holding the remaining 25%.

Both Chevron and Hess had expected and requested that the hearing be held earlier, “but the arbitrators’ common schedules did not make this possible,” the companies said in the filing.

The views of Chevron and Hess on the merits remain unchanged, the companies said. “Exxon and CNOOC continue to ignore the plain language of the operating agreement, and Chevron and Hess remain confident that the arbitration will confirm that the Stabroek ROFR [right of first refusal] does not apply to the Merger,” Chevron and Hess said.