Chevron deal to buy Hess at risk as Exxon, CNOOC eye Guyana stake

By Steve Goldstein

Chevron warned it may not complete its planned buyout of Hess as Exxon Mobil and the China National Offshore Oil Corporation are saying the planned deal would trigger their right to boost their stakes in a Guyana venture.

The warning came in a Securities and Exchange Commission filing, which says that both Exxon and CNOOC informed Hess (HES) and Chevron (CVX) that the U.S. deal triggers a change-of-control provision allowing them to boost their stakes.

Right now, the companies are in talks to resolve the issue, and if necessary they can go to arbitration. If all of that doesn't work, Chevron said it would not complete the Hess deal.

"Chevron and Hess do not believe there is any material likelihood that the circumstances described in this paragraph will occur," said the filing.

Hess has a 30% ownership of the Guyana venture, which has more than 11 billion barrels of oil equivalent. Exxon (XOM) has control of 45% of the venture, and CNOOC (HK:883) has a 25% stake.

The Chevron all-stock offer, initially valued at $53 billion, is now valued at $157.85 per share, or 7% less than the value at announcement.

-Steve Goldstein

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02-27-24 0449ET

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