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Chevron’s Hess win lifts cloud over post-2030 outlook

  • Märkte: Crude oil, Natural gas
  • 28.07.25

Chevron's successful takeover of Hess after a dispute over a massive Guyanese oil discovery turned ugly will go a long way towards answering persistent questions over the US major's long-term growth prospects.

The company moved swiftly to complete its delayed $55bn acquisition of the US independent after an international arbitration panel ruled against ExxonMobil, which had attempted to throw a wrench in the deal. The hard-won victory removes a cloud hanging over Chevron at a time when the second-largest US major has been seeking to boost its reserves and production profile to convince investors it can continue growing output and cash flow well into the next decade. Nagging concerns over the longer-term outlook had helped to widen a valuation gap with ExxonMobil that is now set to narrow.

The resolution brings an end to a saga that had soured relations between the two companies and left top energy lawyers scratching their heads as to how a seemingly standard — albeit confidential — oil contract could have ended up being fought over in a months-long legal battle. At the centre was a spat over the future of Hess' 30pc interest in an 11bn bl oil discovery off the coast of Guyana, the key draw for Chevron and a once-in-a-generation find that is well on the way to transforming the tiny South American nation into an energy powerhouse.

ExxonMobil, the operator of Guyana's Stabroek block with a 45pc stake, and Chinese state-controlled CNOOC with a 25pc interest, argued that the change of ownership would trigger a right of first refusal clause. Hess and Chevron countered that such pre-emption rights did not apply in the event of a corporate takeover — a view that was ultimately upheld in arbitration. Such was its confidence that it would see the deal through in the end that Chevron purchased 5pc of Hess' shares on the open market in the first quarter and also issued long-term debt.

ExxonMobil says it disagrees with the arbitration panel's interpretation, but it will respect the process. And executives said before the ruling that it would be business as usual regardless of the outcome.

Not only does Chevron get the highly prized stake in the Guyanese block — where output of high-margin and low-cost barrels is set to double to 1.3mn b/d in the next few years — but it also adds another shale position with 463,000 net acres (1,900km²) in North Dakota's Bakken basin, as well as other assets in the US Gulf of Mexico and southeast Asia.

Pre-integration work conducted while the dispute was still playing out enabled Chevron to hit the ground running when it was finally able to close the deal, which was first announced in late 2023. Chevron brought forward a goal of achieving annual cost savings of $1bn by the end of 2025, compared with an earlier target of within a year of the transaction closing.

Let the free cash flow

The successful outcome caps a turnaround in fortunes for Chevron, following past drilling setbacks in the Permian as well as cost overruns and delays at a Kazakh oil project that had weighed on the major's share price. The company earlier this year announced plans to slash 15-20pc of its workforce as part of a cost-cutting programme. Chevron is now getting ready to hit the brakes on spending in the Permian as it approaches a production plateau of 1mn b/d of oil equivalent (boe/d) from the prolific play, at which point it will prioritise free cash flow. Output from the Tengiz oil field in Kazakhstan is ramping up to 1mn boe/d, after an expansion project was completed at the start of the year. And project start-ups in the Gulf of Mexico will help Chevron increase production from the region by 50pc to 300,000 boe/d next year compared with 2020 output.


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