Legal Battle Ends: Exxon, Chevron Partner in $6.8B Guyana Oil Expansion

ExxonMobil has approved a $6.8 billion investment in the Hammerhead offshore oil project in Guyana, marking its first joint venture with Chevron as a key partner. The project, the seventh on the Stabroek Block, is expected to commence production in 2029 and will utilize a floating production storage and offloading (FPSO) vessel to produce approximately 150,000 barrels of oil per day (bopd) ExxonMobil Guyana expands capacity^[1]. This development brings the total installed capacity on the Stabroek Block to 1.5 million bopd, with current production at 650,000 bopd projected to rise to over 900,000 bopd by year-end Exxon Mobil approves $6.8B oil expansion offshore of Guyana—its …^[2].

The partnership with Chevron follows a protracted legal dispute over Hess Corp.’s 30% stake in the Stabroek Block, a critical asset in Chevron’s $53 billion acquisition of Hess. Exxon had contested the deal, arguing its right of first refusal applied, but the International Chamber of Commerce (ICC) ruled in Chevron’s favor in July 2025 Chevron wins Exxon case but loses time, oil and billions^[3]. This decision facilitated Chevron’s entry into the Stabroek Block, where it now holds a 30% stake alongside Exxon (45%) and CNOOC (25%) ExxonMobil Adds Another Major Project To Its Guyana Oil ...^[4]. The resolution of the arbitration, which delayed Chevron’s acquisition by over a year, underscores the strategic importance of Guyana’s oil reserves, estimated at over 11 billion barrels ExxonMobil Focuses Investment on Permian, Guyana, …^[6].

Hammerhead will include 18 production and injection wells and is expected to increase total committed investments in Guyana to over $60 billion across seven projects ExxonMobil Guyana expands capacity^[1]. The project’s scale aligns with Exxon’s broader strategy to expand production in high-growth regions, complementing its Permian Basin operations in Texas. By 2030, Exxon anticipates total production capacity of 1.7 million barrels of oil equivalent per day (boe/d) from eight projects in Guyana Exxon Mobil approves $6.8B oil expansion offshore of Guyana—its …^[2].

The economic impact of the Stabroek Block on Guyana has been significant. Over $7.8 billion has been deposited into the country’s Natural Resource Fund since 2019, and more than 6,200 Guyanese are employed in operations, representing 70% of the workforce. ExxonMobil and its contractors have also spent over $2.9 billion with local suppliers since 2015 ExxonMobil Guyana expands capacity^[1]. President Irfaan Ali, a vocal supporter of oil development, was re-elected in September 2025, signaling continued political backing for the project Exxon Mobil approves $6.8B oil expansion offshore of Guyana—its …^[2].

Construction is underway for the fifth and sixth projects, Uaru and Whiptail, with startup expected in 2026 and 2027, respectively ExxonMobil Adds Another Major Project To Its Guyana Oil ...^[4]. The recent Yellowtail project, which added 250,000 bopd, has accelerated production growth. ExxonMobil emphasizes that the Stabroek Block remains one of the fastest-developing offshore oil regions, with operational learnings from prior projects enhancing efficiency .

The partnership with Chevron, despite initial legal challenges, reflects the evolving dynamics in the global oil industry. Analysts note that Chevron’s integration of Hess’s Guyana assets could drive long-term, low-cost growth, though the arbitration’s delay cost Chevron an estimated $3–$6 billion in lost revenue during 2024 ExxonMobil Focuses Investment on Permian, Guyana, …^[6]. For Exxon, the project reinforces its position as a leader in deepwater exploration while expanding its footprint in a region projected to become a major oil supplier.