Chevron CEO Mike Wirth Says Deal with Hess Never in Doubt

Chevron Chairman and CEO Mike Wirth discusses the company's win in a deal to buy Hess.

Chevron Corp. won its arbitration battle with Exxon Mobil Corp. and has closed its $53 billion deal to buy Hess Corp. more than 20 months after the takeover was announced.

The decision is a major victory for Chevron, ending a period of strategic limbo that hurt its stock and prompted questions over the quality of the company’s due diligence when it agreed to buy Hess in October 2023. Chevron Chief Executive Officer Mike Wirth said he would walk away from the deal if they lost the case.

“This creates a premier international and oil and gas company,” Wirth said in an interview with Bloomberg Television.

Chevron shares rose as much as 3% in New York. Exxon fell as much as 2%.

The clash between North America’s biggest energy producers was unprecedented in the modern history of Big Oil, an industry in which companies routinely partner with each other to minimize project risk and share costs. Exxon, which operates and owns 45% of Guyana’s offshore Stabroek Block, claimed it had a right of first refusal over the disposition of Hess’s 30% stake.

Hess and Chevron, however, argued the right didn’t apply because their deal was structured as a corporate merger rather than an asset sale.

In an interview Friday, Wirth said the outcome of the deal was never in doubt.

“This was a straightforward plain reading of a contract,” he said. “It is unfortunate that Hess’ employees and Hess’ shareholders were put through this. It should have been resolved much quicker.”

As the dust settles from a bruising legal battle over the world’s marquee oil bonanza, the leaders of Exxon Mobil Corp. and Chevron Corp. face a new challenge: collaboration.

Chevron’s victory in an international arbitration dispute initiated by Exxon allowed the $53 billion takeover of Hess Corp. to proceed. The prize for Chevron Chief Executive Officer Mike Wirth is a highly coveted stake in a cache of premiere oil discoveries in Guyana.

The catch is that Exxon is the majority owner and operator of those oil fields, which means two of the world’s largest energy behemoths must mend any lingering rift and forge a new partnership. It’s unclear whether enough time as passed to clear any bad blood.

“We tried early on to resolve this and thought we were working together in good faith,” Wirth said in a Bloomberg Television interview on Friday. “And then abruptly we were notified that the other parties decided they wanted to decide through arbitration.”

Even so, Wirth extended an olive branch to Exxon CEO Darren Woods, whose demand for arbitration threatened to derail the biggest deal of Wirth’s career.

For its part, Exxon indicated acceptance of Wirth’s peace offering, pledging to “welcome Chevron to the venture.” The 30% stake in a tranche of Guyanese crude discoveries is the crown jewel o

“Partnership is one of our core values, and we pride ourselves on being a good partner around the world with many, many different companies,” Wirth said in a telephone interview. “We partner with Exxon on projects elsewhere in the world and have for many many years, and I’m sure we will find a way to move forward.”

Exxon’s surprise March 2024 demand for arbitration to halt Chevron’s acquisition of Hess cast a long cloud over the suitor company and its share price, calling into question Wirth’s ability to amass sufficient undrilled oil reserves to bolster future production.

Any such doubts have evaporated. Now, the former foes must find a way to return to business as usual, which for international oil giants routinely involves multibillion-dollar partnerships to execute some of the riskiest ventures on the planet.

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