World Oil
(Bloomberg) – Exxon Mobil Corp. is open to talking to Chevron Corp. about its proposed takeover of Hess Corp. as the oil giants spar over the deal’s implications for a massive offshore oil project in Guyana, Chief Executive Officer Darren Woods said in an interview.
His comments mark that first time Exxon has publicly made clear it’s willing to engage in discussions with Chevron over the issue after filing for arbitration at the International Chamber of Commerce in Paris.
“The channels for dialog remain open,” Woods said. “This is a business issue — this is not a personal one. We’re not trying to stop the Chevron-Hess transaction. We’re trying to preserve the rights we have for the Guyana asset that we’ve developed.”
Exxon has accused Chevron of attempting to “circumvent” a contract that gives Woods’ company a right of first refusal over Hess’s 30% stake in Guyana’s Stabroek block. Chevron agreed to buy Hess for $53 billion last year, in large part to gain access to the Guyana project, operated and 45% owned by Exxon.
The block is one of the world’s fastest-growing major oil developments. Chevron has said it would cancel the entire Hess deal if the company’s stake was not included in transaction.
Earlier Monday, Woods said Exxon is not interested in buying the entirety of Hess. But the company wants the right to establish the value of the company’s Guyana stake, then consider the possibility of buying it if it’s successful in arbitration. The issue is unprecedented in the recent history of Big Oil because most contract disputes play out in private.
“What happened here is the deal went very public without having the necessary discussions and agreement and alignment or understanding of where the different partners were,” Woods said. “It got thrown into the public arena before the dialog really started to happen. That in my mind is the big difference between what we’re experiencing now and what we do in other areas where typically it’s happening behind the scenes.”
Lead image (Credit: Reuters)
