HOUSTON, July 18 (Reuters) – Chevron (CVX.N), opens new tab closed its $55 billion acquisition of Hess (HES.N), opens new tab on Friday after winning a landmark legal battle against larger rival Exxon Mobil (XOM.N), opens new tab to gain access to the largest oil discovery in decades.
Chevron CEO Mike Wirth’s strategy to turn around his company’s lagging performance hinged on the acquisition, one of the largest energy deals in the past decade. The prize is a stake in the prolific Stabroek Block off the coast of Guyana that holds more than 11 billion barrels of oil and is one of the fastest growing oil provinces in the world.
Shares in Chevron rose 3% in premarket trading, while Hess stock jumped 7%. Exxon shares were marginally lower.
“This merger of two great American companies brings together the best in the industry,” Wirth said in a statement.
Exxon and China’s CNOOC, Hess’ partners in Guyana, had filed arbitration disputes that claimed they held a pre-emptive right to purchase Hess’ stake, which delayed Chevron’s closure of the Hess acquisition for over a year.
“We disagree with the International Chamber of Commerce (ICC) panel’s interpretation but respect the arbitration and dispute resolution process,” Exxon said in a statement.
“Given the significant value we’ve created in the development of the Guyana resource, we believed we had a clear duty to our investors to consider our preemption rights to protect the value we created through our innovation and hard work at a time when no one knew just how successful this venture would become,” the company added.
There is no appeals process at the International Chamber of Commerce, the court that oversaw the arbitration case.
CNOOC did not immediately respond to Reuters’ requests for comment.
Even as it awaited the arbitration verdict, Chevron was making preparations so it could close the deal with Hess within 48 hours of resolving the arbitration and complete other operational tasks within 45 days, Reuters previously reported.