By Sabrina Valle
HOUSTON (Reuters) -Exxon Mobil CEO Darren Woods on Monday said his company is trying to establish it holds rights over Hess Corp (NYSE:)’s Guyana assets in its dispute with Chevron (NYSE:), not buy the company itself.
In his first public remarks on the company’s pursuit of an arbitration case that could block Chevron’s $53 billion deal for Hess, Woods said Exxon (NYSE:) would not have waited for Chevron to announce its Hess deal if it had wanted to buy Hess.
“We’re basically standing up for what we believe is a fundamental right,” Woods told Reuters at the CERAWeek energy conference in Houston. Exxon is trying to “secure and confirm the rights in that contract gives the existing partners.”
Chevron and Hess have said they disagree with Exxon’s interpretation of the joint operating agreement that governs the consortium responsible for all of Guyana’s oil production and which Exxon claims includes a right of first refusal.
Woods said he would not rule out acquiring Hess’ entire 30% share in the giant Stabroek block offshore of Guyana, which would take Exxon’s stake to 75%. Exxon currently holds a 45% stake with Hess and China’s CNOOC (NYSE:) Ltd as minority partners.
Stabroek is the prize in Chevron’s bid for Hess. It is the site of the largest oil discoveries in almost two decades and is expected to produce more than 1.2 million barrels of oil and gas per day by 2027.
A potential acquisition of Hess’ assets in Guyana would be the last of a three-stage process Exxon wants to follow, Woods said.
Exxon would first need to resolve the preemption rights dispute and determine the Hess asset’s value with partners before it can consider if it makes sense for Exxon to shoulder the investment required for holding a larger share of the block, the CEO said.
“I don’t feel locked into a 75% number,” the sum of Exxon and Hess’s current stakes, Woods said in an interview. “That is one of the options. And one of the considerations with that option would be the capital requirements that we comfortable with.”
A Chevron spokesman did not reply to request for comment on Woods’ remarks.
Chevron’s acquisition of Hess also has been stalled by the U.S. Federal Trade Commission’s request for additional information on the merger. That request had pushed back any closing to at least the middle of this year, a timeline Hess is now reviewing.
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