The arbitration process critical to the $53bn acquisition of Hess by Chevron has been delayed, as the appointment of the third and final arbitrator remains pending, reported Reuters, citing sources.
This development has stalled the decision on whether ExxonMobil retains a right of first refusal over Hess' operations in Guyana
The arbitration, filed three months ago, is yet to progress as the ICC panel is incomplete.
As per the process, each disputing party is required to appoint one arbitrator, and those two to nominate the third.
The publication’s requests for comment from the ICC, the parent of the panel, did not elicit a response.
Meanwhile, Hess stated: "The arbitration is moving forward and we expect to have a decision by the end of 2024.”
Legal experts indicate that the duration of international arbitrations can vary.
Chris Strong, a partner at Vinson & Elkins and vice-president for model contracts of the Association of International Energy Negotiators, explained that if the two arbitrators cannot agree on a third, they may apply to the administering authority for a decision.
The acquisition, which Hess shareholders approved with a 51% majority, is also awaiting the US Federal Trade Commission's review on antitrust implications.
If successful, Chevron would gain a 30% stake in a prolific Guyana oil consortium, which operates the Stabroek block with more than 11 billion barrels of recoverable oil and gas.
With a 45% stake, ExxonMobil Guyana operates the block, while Hess Guyana Exploration and CNOOC Petroleum Guyana own 30% and 25%, respectively.
The arbitration panel will review Exxon's claim on Chevron's acquisition attempts to bypass its preemption rights under the consortium's joint operating agreement, a confidential document.
While Exxon, Hess and Chevron have not provided a timeline for the panel's completion, Exxon CEO Darren Woods anticipates the dispute could extend into 2025.
In sperate Guyana-related news, Fulcrum LNG has been chosen to collaborate with Guyana and ExxonMobil on a natural gas processing facility project, reported the news agency.
