By the Arunya Kumar
(Reuters) -Exxon Mobil lost its arbitration challenge to block the Chevron HESS deal, but the best producer of oil in the United States managed to delay the connection by over a year, costing its rival billions with lost oil revenue and delay in integration.
The Chevron deal, first announced in October 2023, ended on Friday after a 30% HES dispute in the Stabroek block in Guyana, the most attractive asset in his portfolio. The offshore oil field has more than 11 billion barrels of oil and is one of the fastest growing oil production regions in the world.
Initially, US oil producer # 2 was directed by mid -2024 for the deal.
Exxon, which manages the Guyana project and holds a 45% share together with Hess and CNOOC, disputes the arbitration merger, citing the right to the first refusal of Hess Guyana’s assets.
“The delay kept approximately 180,000 barrels per day (BPD) of Hess Oil, about $ 6-7 billion in gross sales and $ 3 billion profit, just from a Stabrooek block, which sails past Shevron by 2024, as these barrels continue to run to Hes while the lawyers say,” says Maycar, ” Point Capital.
The Chevron deal has been part of the largest wave of consolidation in the oil industry for more than 20 years and has been a strategic counter on the Exxon blockbuster’s own deal and the growing position in Permian.
For Chevron CEO, Michael Wirt, the acquisition of HES and her share in Guyana was central to his strategy for the company’s future growth.
This strategy was in the limb during arbitration, turning what was initially expected to be a clean, timely victory for Shevron into a challenge for high -stakes for Wirt, which had already lost a big deal.
He abandoned his bidding offer for Anadarko Petroleum in 2019 after being surpassed by the higher proposal of the Occidental Petroleum.
Overhanging on a chevron stock
With the closed deal, Hess Chevron said he expects to realize $ 1 billion in running costs by the end of 2025 and will reduce jobs due to overlapping roles between the two companies.
Chevron is in the midst of dismissal of up to 20% of his worldwide workforce, faced with an increase in the problems of safety and his operations in Venezuela, have been caught in a geopolitical crossfire.
“For Shevron, this favorable solution helps the basic time to avoid other time -consuming (and probably expensive) approaches for inorganic growth,” said Atul Raina, Vice President at Rystad Energy.
“If the decision went to the benefit of Exxon Mobil and CNOOC, then Shevron would have to look for growth opportunities elsewhere … This would most likely be a Chevron, paying large premiums to buy premiere assets to US shale, which moves the needle for the main ones,” added Raina.