Chevron closed its $55bn acquisition of Hess on Friday after winning a landmark legal battle against its larger rival Exxon Mobil to gain access to the largest oil discovery in decades.
The strategy of Chevron’s CEO, Mike Wirth, to turn around his company’s lagging performance hinged on the acquisition, one of the largest energy deals in the past decade. The prize is a stake in the prolific Stabroek Block off the coast of Guyana that holds more than 11bn barrels of oil and is one of the fastest-growing oil provinces in the world.
“This merger of two great American companies brings together the best in the industry,” Wirth said in a statement.
Exxon and the China National Offshore Oil Corporation (CNOOC), Hess’s partners in Guyana, had filed arbitration disputes that claimed they held a pre-emptive right to purchase Hess’s stake, which delayed Chevron’s closure of the Hess acquisition for over a year.
“We disagree with the International Chamber of Commerce (ICC) panel’s interpretation but respect the arbitration and dispute resolution process,” Exxon said in a statement.
“Given the significant value we’ve created in the development of the Guyana resource, we believed we had a clear duty to our investors to consider our pre-emption rights to protect the value we created through our innovation and hard work at a time when no one knew just how successful this venture would become,” the company added.
CNOOC said it was also disappointed with the ruling.
There is no appeals process at the International Chamber of Commerce, the court that oversaw the arbitration case.
Even as it awaited the arbitration verdict, Chevron was making preparations so it could close the deal with Hess quickly, Reuters previously reported.
Information technology workers from Chevron and Hess have met regularly to plan the integration, and Hess employees were informed that they could request a severance package following the deal’s close.
In an interview with Reuters on Friday, Wirth said converting technology and combining employees from both companies would take a few months.
Shares of Chevron and Exxon were marginally lower in morning trading.