$53 Billion Guyana Oil Clash Heads to London Tribunal
Chevron’s $53 billion bid for Hess faces arbitration as ExxonMobil and CNOOC claim a contractual right to block the deal.
The outcome is pivotal for Chevron, which urgently needs Hess’s Guyana assets to reverse its declining reserves.
A tribunal ruling is expected by Q3 and could shift the geopolitical balance of oil power in the Western Hemisphere.
A high-stakes arbitration kicks off Monday in London that could make or break Chevron’s $53 billion bid to acquire Hess Corp—and with it, a coveted 30% stake in Guyana’s booming Stabroek Block. ExxonMobil and CNOOC, Hess’s partners in the block, claim they have a right of first refusal on that stake, arguing the Chevron-Hess deal triggers the clause. But Chevron and Hess counter that the right doesn’t apply to full corporate mergers. The outcome rests on contractual fine print, but the implications are massive: Guyana’s Stabroek Block holds over 11 billion barrels of oil equivalent, and output is projected to double by 2030.
For Chevron, this is a make-or-break moment. The company’s reserves replacement ratio (RRR) hit -4% last year, its lowest in a decade. It desperately needs Hess’s Guyana asset to boost its RRR and plug a growing gap in its portfolio. CEO Mike Wirth has already poured over $3 billion into Hess stock and positioned the company to close the deal quickly—if it wins. If not, Chevron walks away, leaving Exxon and CNOOC free to increase their control over one of the world’s hottest oil plays.
The arbitration, led by the International Chamber of Commerce, is expected to move faster than typical, with a ruling anticipated by Q3. Traders are betting big on a Chevron win—about $10 billion worth of Hess shares have been scooped up by merger-arb funds expecting the deal to close, according to Morgan Stanley’s head of Special Situations, Matthew Mitchell, and cited by Bloomberg.
The outcome hinges on the tribunal’s interpretation of a joint operating agreement drafted more than a decade ago.
If Chevron loses, the consequences will ripple far beyond one failed deal, with Exxon largely expected to consolidate its dominance in Guyana. Chevron, meanwhile, would be left scrambling for another big-ticket asset to shore up its future. The tribunal’s ruling could redefine the balance of power in the Western Hemisphere’s most promising oil basin.
By Julianne Geiger for Oilprice.com
Suriname Votes for President Who Will Oversee Newly-Found Oil Wealth
Suriname, the South American nation hoping to replicate Guyana’s oil boom, is voting on Sunday in presidential and general elections to decide who will oversee energy and oil policy in the country over the next five years.
Suriname, a former Dutch colony which gained independence in 1975, has a population of just over 600,000 residents who will choose among five presidential candidates in the May 25 election.
Incumbent President Chan Santokhi seeks a second five-year presidential term against four other contenders. The president’s biggest rival appears to be Jennifer Geerlings-Simons, the leader of the left-leaning National Democratic Party.
Both frontrunners are encouraging more drilling in Suriname’s offshore basin to find more oil and are open to welcoming major international companies to develop projects in the country.
Suriname has been seeing increased investment and exploration in its oil and gas sector, driven by the success of neighboring Guyana and major projects like GranMorgu.
Shell, TotalEnergies, and Petronas are leading exploration efforts offshore Suriname, hoping that the oil treasure trove in neighboring Guyana extends into Surinamese waters.
Oil volumes have been found, and French supermajor TotalEnergies is developing GranMorgu, a $10.5-billion oil project offshore Suriname.
In October, TotalEnergies announced the final investment decision for the GranMorgu development of the fields off the coast of Suriname, which are estimated to hold recoverable reserves of more than 750 million barrels.
First oil is expected in 2028.
The project includes a 220,000 barrels of oil per day Floating Production Storage and Offloading (FPSO) unit.
In 2028, when the project is expected to come on stream, Suriname’s GDP will jump by as much as 55%, the International Monetary Fund (IMF) has predicted.
“In the long term, the oil reserves are not as large as that of Guyana, though Suriname is able to ramp up production rapidly,” the IMF said.
By Charles Kennedy for Oilprice.com
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