Chevron’s Purchase of Hess Expected Approval

By Sabrina Valle

(Reuters) – The U.S. Federal Trade Commission (FTC) is anticipated to approve Chevron (NYSE: CVX)’s acquisition of Hess (NYSE: HES) this week, marking a key step forward in the $53 billion deal. The final hurdle remains a challenge from Exxon Mobil (NYSE: XOM).

The merger was first announced in October, with a subsequent information request from the FTC two months later. Following the news, Hess shares rose by 3% in after-hours trading.

Chevron’s stock has dipped 1% this year amid uncertainties surrounding the deal, contrasting with a 6.5% growth in the XLE energy share fund. Exxon’s challenge revolves around a right of first refusal on the sale of Hess’s valuable Guyana assets, the focal point of the merger.

A three-judge arbitration panel is to review the case in May 2025. While Chevron and Hess expect a decision by August, Exxon anticipates it by September 2025.

This all-stock acquisition stands out in a consolidating oil and gas industry, following Exxon’s own $60 billion purchase of Pioneer Natural Resources, which concluded in May. Other recent mergers include Occidental Petroleum obtaining CrownRock and Diamondback Energy bidding for Endeavor Energy Resources, which occurred after Chevron-Hess.

The FTC required Exxon to retract its offer for a board seat to Pioneer CEO Scott Sheffield due to alleged collusion with OPEC to manipulate oil production in the U.S.

Exxon Arbitration

The ongoing dispute over the Exxon-CNOOC-Hess partnership contract delays the merger’s closure until the latter half of 2025. The Guyana consortium possesses one of the world’s fastest-growing oil regions, with over 11.6 billion barrels of recoverable discoveries since 2015.

Exxon holds a 45% stake in this offshore production consortium, generating $6.33 billion in earnings last year on revenues of $11.25 billion. The information was first reported by CTFN, a financial news provider.