Chevron Closes Hess Acquisition for $53 Billion After Winning Arbitration Case Against Exxon

Chevron wins arbitration case against Exxon and closes $53 billion acquisition of Hess. The deal ends over 20 months of uncertainty and creates a leading international oil and gas company. Chevron's shares rose 3% while Exxon's fell 2%. The dispute was unprecedented in the industry, with Exxon claiming a right of first refusal over Hess' 30% stake in Guyana's Stabroek block. Chevron argued that the right did not apply as the deal was structured as a business combination, not a direct asset sale.

Chevron (CVX.N) has successfully closed its $53 billion acquisition of Hess (HES.N) following a landmark arbitration case against Exxon Mobil (XOM.N). The deal, one of the largest energy transactions in recent history, brings together two major players in the global oil and gas industry. The acquisition provides Chevron access to the prolific Stabroek Block off the coast of Guyana, which holds over 11 billion barrels of oil and is one of the fastest-growing oil provinces worldwide [1].

The arbitration panel, convened by the International Chamber of Commerce in Paris, dismissed Exxon's claim that it had a contractual right to pre-empt Chevron's bid for Hess's 30% stake in the Stabroek Block. Exxon had argued that a right-of-first-refusal applied to the corporate takeover of Hess, but Chevron maintained that this right did not extend to the acquisition structure [1].

The decision, handed down on Friday, July 18, 2025, resolves a long-running dispute that began when Exxon asserted its right to pre-empt Chevron's bid in 2024. The arbitration panel's ruling cleared the way for Chevron to complete the acquisition, which was originally struck in October 2023 [1].

Chevron's shares rose by 3% in pre-market trading following the announcement, while Hess stock jumped by 7%. Exxon's shares, however, were marginally lower [1]. Chevron CEO Mike Wirth stated, "This merger of two great American companies brings together the best in the industry" [1].

The dispute over the Stabroek Block was unprecedented in the industry and attracted significant attention from shareholders, attorneys, and global oil companies. The value of the Stabroek Block, which has driven significant profits for Exxon and transformed Guyana's economy, was a central point of contention [1].

The acquisition marks a strategic move for Chevron, which has been looking to turn around its lagging performance. Chevron's adjusted earnings last year totaled $18.3 billion, down from $24.7 billion in 2023 [1]. The integration of Hess will provide Chevron with a stronger position in the global oil market.

In the broader context of the energy sector, the arbitration ruling and the subsequent acquisition are significant developments. The market's reaction to the decision has been relatively muted, with Brent crude oil and other commodities showing modest movements. The oil market remains focused on other geopolitical and economic factors, such as the European Union's sanctions on Russia [2].

The integration of Hess into Chevron's operations is expected to be a smooth process, with Chevron and Hess employees having met regularly to plan the integration. Hess employees were informed that they could request a severance package following the deal's close [1].

The acquisition of Hess marks a significant milestone for Chevron, positioning the company as a leading international oil and gas player. The integration of Hess's assets, particularly its stake in the Stabroek Block, will provide Chevron with a substantial boost in its oil reserves and production capacity.

References:
[1] https://www.reuters.com/business/energy/chevron-closes-hess-acquisition-after-winning-exxon-legal-battle-2025-07-18/
[2] https://www.marketscreener.com/news/chevron-closes-megadeal-for-hess-after-winning-exxon-arbitration-commodities-roundup-ce7c5cded188f222