A single, overlooked clause in a decade-old joint venture agreement nearly derailed Chevron’s $53B acquisition of Hess Corp, triggering a 20-month legal showdown with ExxonMobil over Guyana’s Stabroek Block — one of the most valuable offshore oil discoveries in recent history.
🔍 The Hidden Trigger
The conflict began in late 2023 when Chevron announced it would acquire Hess, owner of a 30% stake in the Stabroek Block. Exxon, which holds 45% and operates the field (with China’s Cnooc owning 25%), cited a first-right-of-refusal clause that gives partners the right to buy any stake before an outside party. Chevron argued the clause didn’t apply to corporate mergers — Exxon disagreed and filed for arbitration.
💥 From Celebration to Confrontation
Chevron and Hess initially celebrated the deal publicly. But behind the scenes, Exxon’s leadership felt blindsided. By March 2024, Exxon’s Neil Chapman publicly revealed the arbitration filing, catching even Chevron’s CEO Mike Wirth off guard. This move sent Hess stock tumbling and spurred a wave of arbitrage bets from hedge funds.
🏛️ Political & Regulatory Turmoil
As legal battles played out, the FTC launched a probe into past actions by Hess’s CEO, further complicating the deal. Senator Chuck Schumer called for the merger to be blocked, and shareholder resistance mounted. Despite intense lobbying, Hess narrowly secured 51% shareholder approval in May 2024.
⚖️ The Final Verdict
In July 2025, following Donald Trump’s return to the White House, the FTC reversed its earlier objections, allowing Hess to join Chevron’s board. That same day, the arbitration panel ruled in favor of Chevron, clearing the way for the long-delayed acquisition to close.
📌 Summary
• ExxonMobil vs. Chevron: Legal fight over Hess’s 30% stake in Guyana’s Stabroek Block
• Key Clause: First-refusal rights sparked arbitration
• Timeline: 20-month battle involving courts, the FTC, and shareholder drama
• Outcome: Chevron wins arbitration; merger closes July 2025
This case underscores how buried clauses and corporate interpretation can reshape billion-dollar deals in global energy markets.
