HOUSTON (Reuters) – Exxon Mobil wants to “participate” in the sale by Hess Corp. of its oil production assets in Guyana, and derive value from the work it has put into developing the country’s offshore fields, two of its top executives said on Wednesday. .
A three-person panel will decide in May whether Hess’ deal to sell itself to Chevron can go ahead under the original terms. A challenge from Exxon and CNOOC Ltd has stalled the second-biggest deal in a recent wave of oil mega-mergers.
Exxon wants to play a role in the sale of Hess’s 30% stake in its Guyana interests and an option on the assets if its contract claim is supported by arbitration, Exxon CEO Darren Woods said in his key commentary on the arbitration case until now.
Analysts estimate Hess Guyana’s value at 60% to 80% of Chevron’s proposed $53 billion purchase of Hess. The joint venture has discovered more than 11 billion barrels of oil to date.
The proposed sale ignores a joint venture agreement that grants the right of first refusal on any sale of a Guyanese partner’s shares, Exxon and CNOOC claim.
“We have developed the value of that asset. We have the right to consider the value of that asset in this transaction, and then the right to option it. There is an option here. We think this is in the best interest of shareholders to preserve that value option,” CEO Woods said in a call with Wall Street analysts.
Chevron and Hess have denied the claim, arguing that the deal is structured as a merger of the two companies and that Hess’ assets in Guyana remain intact. Hess has said that if the deal with Chevron is not completed, it will not sell its properties in Guyana separately to Exxon or anyone else.
Woods disputed Hess’s view of an arbitration loss souring a sale, saying, “That’s their construct, not ours.”
Exxon wants the three-member arbitration panel to consider the value of Hess Guyana as part of its deliberations.
“We will look at the value and whether that value is in the best interests of the company, the business and the shareholders,” added Neil Chapman, Exxon vice chairman.
(Reporting by Gary McWilliams; Editing by Keith Weir)
