Exxon-Hess arbitration panel nears formation, sources say
2024.07.02 18:24
By Sabrina Valle
HOUSTON (Reuters) – The final member has been chosen for a three-person arbitration panel meant to settle Exxon Mobil (NYSE:)’s claim against Chevron (NYSE:)’s $53 billion purchase of Hess Corp (NYSE:), two people familiar with the matter told Reuters.
The panel’s formation would be a milestone in a long-delayed process that has cast uncertainty over the mega-merger, which both Chevron and Hess had hoped would close in the first half of 2024.
“The appointment of the full arbitration panel is now being completed. We expect to learn more about the (proceedings) schedule in the coming weeks,” said one of the people familiar with the matter.
Exxon filed the arbitration claim with the International Chamber of Commerce (ICC) in March, arguing that it has a right of first refusal over Hess’s assets in Guyana.
Exxon operates all oil production in Guyana, home to one of the world’s biggest recent oil finds, with Hess and China’s CNOOC (NYSE:) as partners.
Exxon asserts that the acquisition of Hess Corp is an attempt to circumvent its right of first refusal over the prized asset in Guyana. Chevron and Hess believe Exxon’s right of first refusal does not apply due to the structure of the merger and language of the Guyana partnership agreement.
To form the three-person panel, each side appoints one arbitrator and then those two nominate the third, according to the people familiar with the process.
On May 9, Hess CEO John Hess said he expected the final arbitrator would be appointed by May 17, according to proxy adviser Institutional Shareholder Services.
Exxon CEO Darren Woods has said he expected the dispute would slip into 2025.
Chevron, Hess and Exxon on Tuesday declined to comment on a timeline for a resolution to the dispute.
