The US Federal Trade Commission (FTC) has approved a final consent order addressing antitrust concerns in Chevron’s $53bn acquisition of Hess.
The decision resolves regulatory issues surrounding the merger but includes restrictions on Hess CEO John Hess’s role in the combined entity.
Under the terms of the final order, Chevron is prohibited from appointing John Hess to its board of directors, a move prompted by concerns about his communications with the Organisation of the Petroleum Exporting Countries (OPEC) during its production curtailment efforts.
Additionally, the order prevents Hess from serving as an adviser or consultant to Chevron. The exception is for two specific areas, which are advising on Hess’s oil-related and health ministry activities in Guyana and representing Chevron in support of the Salk Institute’s Harnessing Plants Initiative.
The order follows a public comment period and was approved in a 3-2 vote.
The FTC’s decision resolves its antitrust review of the merger, initiated in September 2024. However, the acquisition still faces a challenge from ExxonMobil and its partner CNOOC, which claim a right of first refusal over Hess’s stake in the Stabroek block in Guyana.
This dispute will be considered by a three-judge arbitration panel in May 2025, with a ruling anticipated by August or September 2025.
If the merger proceeds, Chevron will gain a 30% stake in the Stabroek block, which holds an estimated 11 billion barrels of oil equivalent, along with opportunities for additional exploration.
The acquisition will also increase Chevron’s presence in North Dakota’s Bakken shale play, adding 465,000 net acres of long-duration inventory.
Furthermore, Chevron will benefit from Hess Midstream’s integrated assets, complementary holdings in the Gulf of Mexico, and a consistent cash flow from Hess’s natural gas business in Southeast Asia.
The merger, announced in October 2023, will see Hess shareholders receive 1.025 Chevron shares for each Hess share held. With FTC clearance secured, the deal’s completion now depends on the resolution of ExxonMobil’s arbitration challenge. Both Chevron and Hess anticipate finalising the transaction later in 2025, subject to the arbitration ruling.
