Chevron CEO Wirth Backs Hess in Exxon Arbitration Over Guyana

(Bloomberg) — Chevron Corp. Chief Executive Officer Mike Wirth reiterated his support for Hess Corp. in its arbitration battle with Exxon Mobil Corp. over disagreements about Guyana’s massive oil field.

The case is the final hurdle in Chevron’s $53 billion deal to buy Hess, which was agreed more than a year ago. Exxon, which operates Guyana’s Stabroek Block and owns a 45% stake, claims to have a right-of-first-refusal over Hess’s 30% share.

“We continue to be very confident in Hess’s position in the arbitration,” Wirth said Wednesday at a conference hosted by Goldman Sachs Group Inc. “This has been studied extensively and we feel like they clearly have the right side of this argument and look forward to closing the deal.”

Wirth said a hearing is scheduled for May, followed by a decision within 90 days.

John Hess, CEO of Hess, made similar comments Tuesday at the same conference. Exxon executives also expressed confidence in their case at an investor meeting in December.

The outcome of the arbitration is likely to have significant implications for how joint operating agreements are written in the oil industry. The winner will obtain, or stake a claim to, a large share of Guyana’s 11 billion barrels of recoverable reserves, the biggest offshore discovery in the past decade.

Most investors see Chevron and Hess emerging as victors in the case, Goldman analyst Neil Mehta said in an interview.

“The view is that Chevron has a high probability of winning,” he said, adding that Goldman isn’t predicting the outcome.

Wirth, who was speaking to Goldman CEO David Solomon, said the changing political landscape around the world, including the US, will likely lead to “less regulation” and “a commitment to investment and growth.” He praised incoming US President Donald Trump’s nominees for secretaries of energy and the interior.

Chris Wright and Doug Burgum are “two of the most qualified nominees I’ve seen in my career,” Wirth said. “That stands in contrast to some of the other nominees we’ve seen in other administrations.”