Guyana Welcomes Chevron’s Entry into Stabroek Project
Guyanese leader Irfaan Ali has a positive attitude towards Chevron’s possible entry into the Stabroek oil project, writes FT with reference to the President of Guyana himself.
Guyanese authorities believe that Exxon’s growing stake in Stabroek Block threatens competition. That is, Chevron’s entry into the country through the acquisition of American Hess will be a boon for Guyana.
Let us recall that in October last year, Chevron announced the purchase of the American Hess for $53 billion. Hess not only has shale assets in the United States, but also 30% in the Stabroek project on the shelf of Guyana. The takeover means that Chevron will control that 30%. On May 28, Hess shareholders must vote on the decision to merge with the American major.
In turn, ExxonMobil is actively opposed to the merger, which stated that it and the third partner, the Chinese CNOOC, have pre-emptive rights to buy out a stake in the Guyana project. Exxon filed a lawsuit with the Paris International Chamber of Commerce to secure the right of first refusal to purchase Hess’ stake, emphasizing that it does not need the company’s other assets.
If the arbitration side takes Exxon’s side, it could receive up to 75% of this very premium piece of the Guyanese hydrocarbon pie. Exxon already has 45% in Stabroek Block, CNOOC has 25%. However, CNOOC would also like to get a share, at least it has joined Exxon’s position regarding preferential rights. Analysts believe that an international court ruling that Exxon was right could even put an end to the Chevron-Hess merger.
On the other hand, Chevron states that an M&A is a transaction that does not have pre-emptive rights to buy out a stake in just one project.
And, as we see, the Guyanese authorities are still on Chevron’s side.
