By Sheila Dang
HOUSTON (Reuters) -The Paris-based International Chamber of Commerce has scheduled a hearing in Exxon Mobil’s arbitration dispute over rival Chevron’s planned acquisition of oil producer Hess for May 26, according to two sources familiar with the matter.
The battle between Exxon and Chevron, the two largest U.S. oil producers, centers on the lucrative Stabroek oilfield off the coast of Guyana, the biggest oil discovery of the past decade.
The dispute has delayed Chevron’s $53-billion deal to buy Hess, which was announced nearly 18 months ago.
While Exxon, Chevron and Hess have previously said the hearing in the arbitration case was scheduled for May, the date has not previously been reported. The sources declined to be named because the details are confidential.
A Hess spokesperson referred to a previous filing in which the company said it expected a decision in the third quarter. Exxon and Chevron did not respond to requests for comment.
The prize asset in Chevron’s acquisition of Hess is the latter’s 30% stake in the Stabroek block. Exxon operates the field and holds a 45% interest. CNOOC, the third partner, holds 25%.
In March last year, roughly four months after Chevron said it would buy Hess, Exxon and CNOOC filed arbitration claims, arguing that their joint operating agreement in the Stabroek block gives them a right of first refusal to buy Hess’ stake. Chevron and Hess claim the right of first refusal does not apply to their merger.
The arbitration case was filed through the International Chamber of Commerce and a three-judge panel will consider the applicability of the right-of-first-refusal clause.
While the ICC is based in Paris, it is unclear where the May 26 hearing will take place. The arbitration rules on the ICC’s website state that hearings can take place in-person or virtually.
Closing the acquisition of Hess and gaining access to the Stabroek is crucial for Chevron. The field has pumped more crude than initially expected and would provide a material boost to Chevron’s total oil output. It would also add to Chevron’s oil and gas reserves, which fell to their lowest point in at least a decade at the end of 2024.
The block is estimated to hold more than 11 billion barrels of oil equivalent in recoverable resource.
In March, Chevron disclosed that it bought 4.99% of Hess’ common shares on the open market, which the company said reflected its confidence in completing the acquisition.
(Reporting by Sheila Dang in Houston; Editing by Nia Williams)
