World Oil
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(WO) – The arbitration process to determine whether ExxonMobil can block the $53 billion sale of Hess Corp to Chevron is stalled due to the incomplete appointment of a third arbitrator, according to Reuters.
The case, filed three months ago, concerns Exxon’s claim to a right of first refusal over Hess’ operations in an oil-rich region offshore Guyana. Delays in appointing the final arbitrator could prevent a decision within this year.
The International Chamber of Commerce, which oversees arbitration, has not provided a timeline for the decision. Both sides appoint one arbitrator each, and those two choose the third. Hess expects a decision by the end of 2024, but the timeline is uncertain and dependent on arbitration rules.
Exxon argues that Chevron is bypassing its preemption right in the Guyana oil consortium’s joint operating agreement (JOA). Exxon holds 45% of the consortium, Hess 30%, and CNOOC 25%. Chevron contends that the preemption right does not apply to the sale of Hess Corp as a whole.
Hess aims for arbitration to be completed by the end of 2024, but Exxon believes the dispute may extend into 2025. Exxon emphasizes the intent behind the JOA, created with its original partner Shell, as crucial in arbitration. The specific language and valuation of the asset offshore Guyana in the JOA will be central to the arbitration decision.
Chevron hoped to finalize the acquisition by mid-2024, but the arbitration and pending regulatory review by the U.S. Federal Trade Commission introduce uncertainties.
This story was orginally reported by Reuters.
Lead image (Credit: Reuters)
