Chevron’s previously announced $53bn acquisition of rival American publicly listed oil and gas company Hess is reportedly set to get approval from the US Federal Trade Commission (FTC).
The all-stock deal was announced in October 2023. It has been facing delays owing to arbitration claims from ExxonMobil and its partner CNOOC, asserting a right of first refusal for Hess’s stake in an oil-producing joint venture in Guyana.
ExxonMobil’s challenge is the only hurdle for closing the deal, reported Reuters, citing two undisclosed sources familiar with the matter.
An arbitration panel comprising three judges is expected to review the case in May 2025, as per the publication. Both Chevron and Hess believe that a ruling is likely to come by August, while ExxonMobil is expecting it to be announced by September 2025.
By acquiring Hess, Chevron will secure a 30% stake in Guyana’s offshore Stabroek block. The concession is estimated to have more than 11 billion barrels of oil equivalent, with the possibility for exploration of several billion additional barrels.
Additionally, in the Bakken shale play in North Dakota, Chevron will increase its acreage by adding 465,000 net acres of long-duration inventory, which will be further bolstered by the integrated assets of Hess Midstream.
Chevron will also gain complementary assets in the Gulf of Mexico through the deal and benefit from a consistent stream of free cash flow coming from the Southeast Asia natural gas business of Hess.
According to the terms of the deal, Hess’ shareholders will exchange each of their shares in the company for 1.025 Chevron shares.
Last month, Chevron reported net income of $4.44bn for Q2 2024, a 26% decrease from $6bn in the same quarter of the previous year. The firm’s global net oil-equivalent production surged by 11% year-on-year, largely driven by the acquisition of PDC Energy and strong yields from the Permian and Denver-Julesburg (DJ) Basins in the US.
