Chevron completes $53 billion acquisition of Hess
Chevron has officially completed its $53 billion acquisition of Hess Corporation, marking a significant victory not only in the energy sector’s ongoing consolidation wave but also in a high-stakes legal battle with rival Exxon Mobil. The deal had been under threat due to a legal dispute over coveted oil assets located offshore Guyana — one of the most promising new oil frontiers in the world.
The International Chamber of Commerce (ICC) ruled in favor of Chevron, rejecting Exxon and China National Offshore Oil Corporation’s (CNOOC) claim to a right of first refusal on Hess’s 30% stake in the Stabroek Block — a massive oil development project off Guyana’s coast. Exxon, which operates the block with a 45% stake, and CNOOC, which holds 25%, argued that their contract entitled them to purchase Hess’s stake before any third-party acquisition could proceed.
Chevron’s CEO Mike Wirth welcomed the decision, calling it a validation of long-standing industry practice.
“It’s a straightforward interpretation of contract language, and we’re very pleased that the transaction has now closed,” Wirth said in an interview with CNBC. “It’s good for Chevron and good for the industry.”
The ICC’s ruling removes the final obstacle to Chevron’s transformative acquisition, which grants it access to one of the fastest-growing oil basins globally. With production in Guyana surging and the Stabroek Block expected to deliver significant output and revenue for years, the deal positions Chevron to compete more directly with Exxon in offshore exploration and production.
Despite the legal loss, Exxon struck a conciliatory tone in a statement:
“We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved.”
Still, Exxon made clear its disagreement with the ICC panel’s decision, though it acknowledged the legitimacy of the arbitration process.
The months-long dispute had cast doubt on whether the Chevron-Hess merger would proceed, creating volatility in Chevron’s stock. On Friday, shares dipped nearly 1% despite having gained more than 2% in premarket trading on the news of the resolution. Exxon’s shares, meanwhile, fell over 3%.
As the two oil giants move forward, Chevron’s integration of Hess will involve workforce reductions. Wirth confirmed that some job cuts are expected, consistent with earlier announcements to reduce headcount by up to 20% as part of broader cost-cutting efforts.
“There are some overlaps, and so you’ll see some reductions,” Wirth noted. “But our industry is like many others where you have to continually look to be efficient.”
Chevron’s acquisition is not just a business expansion — it’s a strategic play for long-term dominance in a crucial energy-producing region. With Exxon and Chevron now partnered in Guyana, the ruling may signal a new era of uneasy cooperation between two of the world’s biggest oil companies in one of the world’s richest new oil basins.
