On May 26 in London a three-judge International Chamber of Commerce panel will finally begin considering the Exxon claim that the Stabroek joint operating agreement grants them the right-of-first-refusal in Chevron’s acquisition of Hess’s 30% share of the massive field (>11 billion boe) offshore Guyana.
Exxon’s position claim seems weak to most analysts given that Chevron is not buying the Stabroek share; they are buying the company (Hess) that holds that share.
Exxon’s rather unlikely ally in this case is state-owned China National Offshore Oil Corp. How did CNOOC get a stake in Stabroek and why is their position on the Hess acquisition hypocritical?
CNOOC became a 25% Stabroek partner by acquiring Canadian Nexen in 2013. Their Nexen acquisition, which included Canadian, US, and international assets, was only reluctantly approved by the Canadian and U.S. governments, and probably would not be approved today.
CNOOC’s Stabroek acquisition is thus very similar to Chevron’s. In both cases, the entire company, not just the Stabroek asset, was acquired.
The Stabroek acquisition has proven to be most fortuitous for CNOOC, not only because of the oil and gas resources, but also through the deepwater development expertise that has been gained. Now CNOOC is trying to further leverage their Stabroek position by joining Exxon in challenging the Chevron acquisition.
It would be great if the arbitration proceedings were streamed, but that will not be the case. It also appears unlikely that media will be allowed to attend or that transcripts will be made available.
As previously noted, I would have liked the Guyanese government to be more assertive in this dispute. Stabroek is Guyana’s offshore gem, their most important economic asset. This lengthy dispute has to affect partner teamwork and communication. From safety, environmental, and production standpoints, do you want feuding partners managing such an important national asset?
Bud's Offshore Energy (BOE) 