11/10/2024 by Richard
US-based oil major Chevron has announced that the company’s merger with fellow US-based oil company Hess has passed an antitrust review.
This was undertaken by the US Federal Trade Commission (FTC). Mike Wirth, the CEO and chairman of Chevron, said the FTC’s approval marked a significant milestone in completing the merger. He said this would not only benefit shareholders by complementing an already significant portfolio with further “world-class assets”, but also the wider industry and Guyana, where Hess holds significant assets.
Nevertheless, the two companies agreed that John Hess, the CEO of Hess, will no longer be a board director of Chevron, which also makes Texaco lubricant and grease products, to facilitate the merger’s completion. He will instead advise Chevron on social investments and government relations in Guyana.
Wirth said he respected John Hess, his industry contributions and his company, adding:
“It is unfortunate that our Board of Directors will not get the benefit of his decades of global experience, but we look forward to drawing upon his knowledge, relationships and experience in Guyana through his service as an advisor to Chevron.”
Other conditions must be met before the merger can proceed, however. The most notable stumbling block could be the ongoing arbitration over the rights to Hess’s interest in Guyana’s prolific Stabroek Block. ExxonMobil believes the joint operating agreement gives it first refusal on Hess’s interest, while Chevron and Hess have taken the position that this does not apply, because the assets are being transferred as part of a merger rather than a sale.
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