Exxon Mobil Pursues Stake in Hess Corp's Guyana Oil Assets

HOUSTON (Reuters) – Exxon Mobil (NYSE:XOM) wants to "participate" in Hess Corp (NYSE:HES)’s sale of its Guyana oil production assets, aiming to leverage the value derived from its development of the country’s offshore fields, according to statements from two top executives.

A three-person panel is set to determine in May whether Hess's deal to sell itself to Chevron (NYSE:CVX) can proceed on its original terms. A challenge from Exxon and CNOOC (NYSE:CEO) Ltd has delayed this significant deal in a series of recent oil megamergers.

Exxon is seeking involvement in any sale of Hess’s 30% stake in its Guyana holdings and is also looking for an option on the assets depending on the outcome of its arbitration claim, said Exxon CEO Darren Woods in remarks emphasizing the arbitration case.

Analysts estimate that the value of Hess's Guyana assets could be between 60% to 80% of Chevron's proposed $53 billion acquisition of Hess. The joint venture has uncovered over 11 billion barrels of oil to date.

Exxon and CNOOC assert that the proposed sale disregards a joint venture agreement that grants the right of first refusal for any sale of a partner's stake in Guyana.

Woods stated, "We developed the value of that asset. We have the right to consider that value in this transaction and then the right to take an option on it. It is in the best interest of shareholders to maintain that value option."

Chevron and Hess have dismissed this claim, arguing that the deal is structured as a merger, leaving Hess's Guyana holdings intact. Hess has indicated that if the Chevron deal fails, it will not sell its Guyana properties to Exxon or any other party separately.

Woods countered Hess's assertion that loss at arbitration would derail a sale, asserting, “that’s their construct, not ours.”

Exxon is urging the arbitration panel to evaluate the value of Hess's Guyana assets as part of its considerations.

“We will look at the value and see if that value is in the best interest of the company, the corporation, and the shareholders,” added Exxon Vice Chairman Neil Chapman.