Adds Chevron response.
ExxonMobil has filed for international arbitrators to resolve a disagreement over a stake in offshore Guyana oil production rights, a move that could derail Chevron's $53bn takeover of US producer Hess.
The dispute revolves around Hess' 30pc stake in the giant offshore Guyana Stabroek block, which is a prime driver behind Chevron's proposed acquisition of the US independent producer. Chevron maintains that ExxonMobil's pre-emption provision does not apply here because of the structure of its merger with Hess and the language in the contract.
"We fully intend on ensuring that we preserve those pre-emption rights," ExxonMobil's senior vice president Neil Chapman said at Morgan Stanley's Energy & Power Conference in New York today.
The arbitration case will be heard at the International Chamber of Commerce in Paris. The process could take 5-6 months, according to Chapman.
Terms of the joint operating agreement in question, which was co-authored by ExxonMobil, were based on an industry standard, Chapman said. A number of observers said it was a surprise the issue was not clarified before Chevron made its bid for Hess.
"Most observers in this industry would understand our reputation for rigor, attention to detail in contract language," Chapman said. "What that means is we're extremely confident in our position that preemption rights exist in this contract."
In response today, Chevron said it remains "fully committed to the transaction, and are confident in our position."
The Chevron-Hess transaction was an attempt to "circumvent" the agreement when ExxonMobil had taken "tremendous" exploration and financial risks in Guyana in the early days, Chapman said.
"We as a participant, have the rights to match a reasonable allocation of the value of the Hess transaction associated with their position in the Stabroek block," Chapman said.
If the Chevron-Hess deal does not go ahead, Chapman hinted at the possibility that ExxonMobil could end up acquiring the stake at some point in the future. "If that transaction does not proceed, there is potential value down the road for ExxonMobil," he said.
