Hess Corporation’s shareholders have agreed to the oil company's impending $53bn acquisition by Chevron.
The majority of Hess shares were cast in support of the merger agreement, although the exact vote count was not disclosed.
No consent from Chevron shareholders is needed for the merger to proceed.
However, the deal is at the risk of jeopardy due to Exxon’s claim of a right of first refusal on Hess’ assets in Guyana.
These assets are part of a significant offshore oil area, known as the Stabroek Block, where Hess holds a 30% interest.
Exxon, the lead developer, has a 45% stake, and China National Offshore Oil Corporation owns the remaining 25% stake.
“Completion of the merger remains subject to other closing conditions, including expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the satisfactory resolution of ongoing arbitration proceedings regarding preemptive rights in the Stabroek Block joint operating agreement,” Hess said in a statement.
In March 2024, Exxon initiated arbitration to assert its rights as per the joint operating agreement.
Both Chevron and Hess have informed their investors that the acquisition would be void if Exxon’s claim is upheld.
Despite this, Chevron has consistently argued that the joint operating agreement's terms do not affect its purchase of Hess.
Exxon CEO Darren Woods, in an April interview with CNBC, expressed confidence in the arbitration process, stating, the US oil major wrote the agreement that governs the Stabroek consortium.
Following Hess’ shareholder approval, Chevron said: “We anticipate moving the FTC regulatory process towards its conclusion in the coming weeks. We are confident our position on the preemption right will be affirmed in arbitration and are working to advance the process on this straightforward matter.”
The Chevron-Hess transaction was initially expected to conclude in the first half of 2024, but due to the Exxon dispute, this timeline is now uncertain.
Woods anticipates that the arbitration could extend into 2025. He has clarified that Exxon has no intention of bidding for Hess but aims to affirm its rights under the joint operating agreement and determine the valuation of Hess' assets in Guyana within the Chevron deal.
