Chevron Corp. and Hess Corp. have been in discussions with ExxonMobil Corp. and China National Offshore Oil Corp. regarding a right of first refusal provision in the joint operating agreement for Stabroek block offshore Guyana.
Chevron confirmed the discussions in a Feb. 26 filing with the US Securities and Exchange Commission (SEC).
In October 2023, Chevron entered a deal to acquire Hess in a stock deal valued at $53 billion that would see Chevron gain Hess’s 30% non-operated interest in the ExxonMobil-operated Stabroek block (45%) (OGJ Online, Oct. 23, 2023).
“If these discussions do not result in an acceptable resolution and arbitration (if pursued) does not result in a confirmation that such right of first refusal provision is inapplicable to the merger, then there would be a failure of a closing condition under the Merger Agreement, in which case the merger would not close,” Chevron said.
Stabroek block, Guyana
Stabroek block is held through a consortium comprised of ExxonMobil (operator, 45%), Hess Guyana Exploration Ltd. (30%), and CNOOC Petroleum Guyana Ltd. (25%). Reserves are estimated at 11 billion bbl. The area lies over 200 km offshore Guyana and spans more than 6.6 million acres.
ExxonMobil made four additional discoveries on Stabroek block in 2023. Prosperity, the third floating production, storage, and offloading (FPSO) vessel, started production at the Payara development on the block in November 2023. Liza Destiny and Liza Unity FPSO vessels continued to produce above nameplate capacity. Combined gross production from the three operating vessels exceeded 390,000 b/d of oil in 2023 and nearly 440,000 b/d in fourth-quarter 2023, ExxonMobil said in a Feb. 28 SEC filing.
Yellowtail and Uaru, the fourth and fifth developments on the block, are progressing on schedule and will each initially produce about 250,000 b/d, the operator continued, telling the SEC it anticipates six FPSOs will be in operation on Stabroek block by year-end 2027.