Hess says reviewing timeline for closing Chevron's takeover deal
March 7 (Reuters) - U.S. oil producer Hess HES.N said on Thursday it was reviewing the timeline for closing its takeover deal by Chevron CVX.N after oil major Exxon XOM.N signaled a potential counter offer for Hess’s Guyana assets.
Exxon on Wednesday filed a contract arbitration claim related to Hess’ proposed sale of its Guyana oil properties and suggested it may counter Chevron’s pending deal for the assets.
The dispute between the top U.S. oil producers could end the Hess takeover deal, Chevron warned in a securities filing last month. If the deal falls part, Hess could be liable for a $1.7 billion breakup fee.
The arbitration case seeks to preserve Exxon’s right to evaluate making a bid for Hess’ 30% stake in the giant Stabroek offshore oil block if Chevron proceeds with its proposed $53 billion purchase of Hess.
“Exxon is currently in the process of closing the $60-billion acquisition of Pioneer Natural PXD.N … plausible to think that moving toward arbitration could help delay the CVX-Hess transaction and allow Exxon to be in a position for another major deal with Hess thereafter,” RBC Capital Markets analyst Biraj Borkhataria said.
Chevron’s acquisition of Hess has already been stalled by the U.S. Federal Trade Commission’s request for additional information on the merger. That request pushed back any closing to at least the middle of this year and Exxon’s claim could extend it further.
Hess told employees that it disagreed with Exxon’s interpretation of the agreement and was confident that its position will prevail in arbitration.
(Reporting by Arunima Kumar in Bengaluru; Editing by Shilpi Majumdar and Shounak Dasgupta)
Related Knowledge Center: ENERGY BASICS: nuclear
Nuclear energy provides almost 20 percent of the U.S. electricity supply. Advocates have called for an expanded role for nuclear as an emissions-free fuel source. But the economics of building new reactors are daunting. In addition, lingering safety concerns are an institutionalized part of the calculation of nuclear regulation, and highly radioactive nuclear waste remains a can that public officials have been inclined to kick down the road. The Energy Information Administration projects a sharp decline in nuclear power generation over the next decade, as new nuclear plants — two are planned — are more than offset by anticipated retirements of several operating reactors.