Exxon Mobil Seeks Right of First Refusal in Hess Sale

HOUSTON (Reuters) – Exxon Mobil (NYSE:XOM) aims to maintain its right of first refusal regarding Hess Corp (NYSE:HES)'s sale of its Guyana oil production assets due to its contributions in developing the offshore fields, executives stated on Wednesday.

A three-person panel is set to decide in May whether Hess's sale to Chevron (NYSE:CVX) can proceed under its original terms. Exxon's and CNOOC's (NYSE:CEO) challenges have delayed the second-largest oil merger in recent times.

Exxon CEO Darren Woods emphasized, "We developed the value of that asset. We have the right to consider the value of that asset in this transaction, and then the right to take an option on it." He also mentioned that both Exxon and CNOOC can seek their right of first refusal.

Representatives from Hess and Chevron have declined to comment on the situation.

Analysts estimate Hess Guyana's value to be between 60% to 80% of Chevron's proposed $53 billion acquisition of Hess, with the joint venture having discovered more than 11 billion barrels of oil.

Exxon and CNOOC argue that the proposed sale neglects a joint venture agreement that permits the right of first refusal for any sale of a Guyana partner's stake. The companies have previously dismissed Hess's claims, stating the deal is structured as a merger and Hess's Guyana assets remain unaffected. Hess has indicated that if the Chevron transaction fails, it will not sell its Guyana properties to Exxon or any other bidders.

Woods dismissed concerns that a loss at arbitration could jeopardize the sale, deeming it Hess's perspective rather than Exxon's.

Exxon is urging the arbitration panel to factor in the value of Hess Guyana when making their decision. "We'll look at the value and see if that value is in the best interest of the company, the corporation, and the shareholders," added Exxon's Vice Chairman Neil Chapman.