General – Legal Battle
Chevron will proceed with its $53 billion acquisition of Hess, after it prevailed in a landmark legal battle against larger rival Exxon Mobil to gain access to the largest oil discovery in decades.
Exxon, which operates the Stabroek Block with a 45% interest, and China’s CNOOC, which holds 25%, filed arbitration claims against their partner Hess last year, arguing they had a contractual right-of-first-refusal to buy Hess’ 30% interest in the joint venture. Chevron and Hess claimed the pre-emptive right did not apply to the sale of the entire Hess company.
The claims from Exxon and CNOOC kicked off a legal battle that delayed Chevron’s acquisition by at least a year and captured the attention of the global oil industry, shareholders, and attorneys who craft joint operating agreements that govern oil partnerships around the world.
The dispute probably focused on the interpretation of just a few words in the confidential joint operating agreement between Exxon, Hess, and CNOOC, experts told Reuters.
