US-based oil major Chevron has now completed its acquisition of Hess Corporation after a favourable ruling over Hess’s Guyana interest.
In addition to meeting the required closing conditions, Chevron was keen to resolve a claim by ExxonMobil, the maker of the Mobil SHC gear oil range. Exxon had argued that it had first refusal to buy Hess’s 30% interest in the Guyana Stabroek Block.
The block has seen one of the biggest discoveries in recent years, and Hess’s stake was regarded by Chevron as being a vital asset. The International Chamber of Commerce ruled in Chevron’s favour, saying the right to first refusal didn’t apply because Chevron was buying Hess in its entirety. The Federal Trade Commission (FTC) also dropped its earlier objection to John Hess joining the Board of Directors at Chevron.
Mike Wirth, the CEO and chairman of Chevron, said that the deal brought together the industry’s best by combining two prominent American companies. He added:
“The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders. Additionally, I’m pleased with the FTC’s unanimous decision. John is a respected industry leader, and our Board would benefit from his experience, relationships and expertise.”
Chevron, the maker of Texaco grease products in the UK, already had a diverse portfolio of assets around the world. The integration of Hess adds extensive high-quality acreage in the US Bakken region and a 30% share in the over 11 billion barrels of oil equivalent that have been discovered offshore of Guyana.
