ExxonMobil Seeks Arbitration in Dispute Over Stabroek Block Operations with Chevron and Hess

ExxonMobil Corp. initiated arbitration proceedings on March 6 to clarify the terms of the joint operating agreement for the Stabroek block offshore Guyana, involving Chevron Corp. and Hess Corp.

This move comes in the wake of Chevron’s announcement last autumn of its intention to acquire Hess for $53 billion, a deal that ExxonMobil contends should trigger its right of first refusal for Hess’s 30% stake in the Stabroek block, which is operated by ExxonMobil and includes participation from China National Offshore Oil Corp. Despite Chevron’s assertion that the right of first refusal does not apply to its acquisition of Hess, ExxonMobil has escalated the matter to the International Chamber of Commerce for arbitration, a process that could extend up to six months, according to ExxonMobil’s Senior Vice-President Neil Chapman.

Speaking at a Morgan Stanley conference on the same day, Chapman emphasized the importance of arbitration to safeguard the value of the Stabroek project for shareholders, expressing confidence in ExxonMobil’s position based on the contract’s language, which the company had a hand in drafting. The news of the arbitration request positively impacted ExxonMobil’s stock, which saw a 1.5% increase to approximately $107 by early afternoon on March 6. Meanwhile, Chevron’s shares experienced a slight rise to around $150, but Hess’s stock fell by about 1% to nearly $145.