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Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), two of the largest oil companies in the U.S., are currently taking the global oil sector by storm. They are entangled in a high-stakes dispute over lucrative oil assets in Guyana. The clash between these energy giants has escalated as Chevron’s pending $53 billion acquisition of Hess Corp. aims to secure a strategic foothold in Guyana’s vast oil reserves, notably the Stabroek oil block.
Exxon’s Claim and Chevron’s Stance
Exxon, with a 45% stake in the Stabroek block, has adamantly asserted its right of first refusal over Hess’ assets in Guyana, citing a joint operating agreement (JOA). The JOA, a legal framework governing the operations, is under scrutiny as Exxon contends that any deal involving Hess must recognize its preemptive rights. On the other hand, Hess only has a 30% stake in the Stabroek block.
“We want to make sure the rights afforded to us under the JOA are recognized and conformed with,” Exxon CEO Darren Woods said during a recent interview with CNBC, adding, “It gives us the opportunity to … make sure that we’re making a decision that’s in the best interest of the company and the shareholders.”
To this end, Exxon initiated arbitration proceedings at the International Chamber of Commerce in Paris, after Chevron disputed its assertion of a right of first refusal.
Chevron has remained resolute in its pursuit of Hess despite the challenges. The company expects the conclusion of the shareholder vote and the Federal Trade Commission’s inquiry into the deal by the second quarter, paving the way for the acquisition to be concluded by the end of this year.
Promising Dividends
Notably, Exxon, the largest oil producer in the U.S., is a Dividend Aristocrat stock and is expected to become a Dividend King within the next decade. The company has raised its dividends for 41 consecutive years as of 2023, with the latest hike announced in the fourth quarter of 2023.
Exxon currently pays $3.80 in dividends annually, yielding 3.28% on the current price. The oil behemoth’s four-year average dividend yield stands at 5.06%.
Chevron, on the other hand, boasts an even higher dividend yield, as it pays $6.52 per share annually. The company’s dividend yield stands at 4.01% on the current stock price. Furthermore, its average dividend yield over the past four years is 4.39%
Source: Yahoo Finance
