Exxon Mobil wants to “participate” in the sale by Hess Corp. of its oil production assets in Guyana and promote the work it has done to develop the country's offshore deposits, two of its executives said on Wednesday.
In May, a three-person panel will have to decide whether the agreement to sell Hess to Chevron can be implemented under the original conditions. The challenge from Exxon and CNOOC Ltd has blocked the second-largest deal in the recent wave of oil mega-mergers.
Exxon wants to play a role in any sale of Hess' 30% stake in its Guyana holdings and gain an option on the assets if its contract request is supported by arbitration, Exxon CEO Darren Woods said. in his most significant comments on the arbitration case to date.
Analysts have estimated the value of Hess Guyana at between 60 and 80 percent of Chevron's proposed $53 billion purchase of Hess. The joint venture has discovered more than 11 billion barrels of oil to date.
Exxon and CNOOC argue that the proposed sale ignores a joint venture agreement that grants the right of first refusal to any sale of a Guyanese partner's stake.
“We have developed the value of this asset. We have the right to consider the value of this asset in this transaction and then the right to take an option on this asset. There is an option here. We believe it is in shareholders' interest in maintaining this value option,” Chief Executive Officer Woods said, speaking to Wall Street analysts.
Chevron and Hess have rejected this allegation, arguing that the deal is structured as a merger of the two companies and that Hess' holdings in Guyana remain intact. Hess said that if the deal with Chevron was not completed, it would not separately sell its Guyana properties to Exxon or anyone else.
Mr Woods disputed Hess's view that a loss in arbitration would jeopardize the sale, saying “that's their design, not ours”.
Exxon wants the three-person arbitration panel to consider the value of Hess Guyana as part of its deliberations.
“We will look at the value and see if it is in the best interest of the company, the business and the shareholders,” added Neil Chapman, vice chairman of Exxon.
