Chevron has emerged victorious in a landmark legal battle against Exxon Mobil, clearing the way to finalize its $53 billion acquisition of Hess Corporation on July 18, 2025. This win grants Chevron access to one of the most significant oil discoveries of the century: the Stabroek Block, a sprawling 6.6 million-acre offshore oil field off the coast of Guyana, home to over 11 billion barrels of discoverable oil equivalent.
The arbitration ruling, overseen by the International Chamber of Commerce (ICC), marks a major triumph for Chevron and its CEO Mike Wirth, whose bold strategy hinged on acquiring Hess despite a protracted legal challenge from Exxon. Chevron’s shares surged more than 5% in pre-market trading following the announcement, while Hess shares spiked approximately 11%, reflecting investor optimism about the deal’s completion and its long-term growth prospects.
“This merger of two great American companies brings together the best in the industry,” Wirth said in a statement. “The combination enhances and extends our growth profile well into the next decade, which we believe will drive greater long-term value to shareholders.” Former Hess CEO John Hess is set to join Chevron’s board after the Federal Trade Commission lifted a previous block on July 17, 2025, allowing the acquisition to proceed without further regulatory hurdles.
The acquisition was initially announced in October 2023 as an all-stock deal, with Chevron aiming to close no later than June 2024. However, the deal was stalled for nearly two years due to Exxon’s legal challenge asserting a right of first refusal over Hess’s stake in the Guyana partnership. Exxon, which discovered the Guyana oil fields around 2015 and operates the exploration and production, argued that this right should apply to the sale of Hess’s interests. Chevron and Hess countered that the right did not extend to the sale of the entire company.
In its statement, Exxon expressed disagreement with the arbitration panel’s interpretation but acknowledged the ruling. “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,” Exxon said. “We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved.”
Under the new ownership structure, Exxon will continue to lead the Guyana partnership with a 45% stake, Chevron will hold 30%, and China’s CNOOC will maintain 25%. The partnership’s collaboration, despite rivalry and legal disputes, highlights the enormous value and potential of the Stabroek Block, which has transformed Guyana into one of the fastest-growing oil-producing regions globally.
Industry analysts are optimistic about Chevron’s prospects following the deal. RBC Capital analyst Biraj Borkhataria noted that many investors had been hesitant amid the legal uncertainty but are now expected to back Chevron’s stock. “The industry can now move on beyond the ‘soap opera’ and expect Chevron shares to outperform in the coming weeks,” Borkhataria said. He emphasized that the focus will soon shift to Chevron’s free cash flow growth stemming from the acquisition, projected to materialize by 2026 and beyond.
The acquisition significantly boosts Chevron’s production capacity, adding nearly 500,000 barrels of oil equivalent per day. This raises Chevron’s total output from 3.35 million barrels daily to about 3.83 million barrels, narrowing the gap with industry leader Exxon, which produces 4.55 million barrels daily based on first-quarter results.
While the Stabroek Block is the crown jewel of the Hess acquisition, Chevron also gains valuable assets in the Bakken Shale of North Dakota, where Hess holds 465,000 net acres in a maturing but still productive oil and gas field. Additionally, Chevron acquires Hess’s operations in the Gulf of Mexico and its Southeast Asia natural gas business, further diversifying its portfolio. It remains to be seen whether Chevron will divest any of these assets, given its existing substantial presence in both the U.S. Gulf and Asia.
The legal battle itself was unprecedented in modern Big Oil history, lasting 20 months and involving intricate disputes over contractual rights. The core contention revolved around the interpretation of a few words in the confidential joint operating agreement between Exxon, Hess, and CNOOC. The prolonged arbitration delayed the deal’s closure and clouded Chevron’s strategic outlook, leading to stock volatility and investor uncertainty.
Wirth reflected on the ordeal, telling Reuters, “It didn’t have to happen this way. We were engaged in good faith conversations, actually for months, which ended abruptly when we were notified that they (Exxon) were going to file for arbitration.” He added, “The outcome is simple and straightforward, as we expected from the beginning.”
Despite the dispute, Exxon CEO Darren Woods has maintained that the company’s relationship with Chevron on other projects remains amicable. CNBC reported Woods stating that Exxon is reviewing the ruling to adjust future contracts to better protect its interests. “This was never a Chevron thing. This was more about getting the contracts enforced the way they were intended,” Woods said.
Chevron and Hess teams had been preparing for integration well before the ruling, with information technology workers from both companies coordinating closely. Hess employees were also informed about severance options following the deal’s completion. Wirth noted that combining technology systems and employees would take several months.
Financially, Hess’s earnings from Guyana surged to $3.1 billion in 2024, up from $1.9 billion in 2023, underscoring the asset’s growing profitability. Chevron’s adjusted earnings last year totaled $18.3 billion, down from $24.7 billion in 2023, reflecting broader industry challenges but also the company’s focus on strategic growth through acquisitions like Hess.
The Stabroek Block’s significance extends beyond Chevron and Exxon. It has transformed Guyana’s economy and is considered one of the fastest-growing oil provinces worldwide. The arbitration’s outcome not only impacts these companies but sets a precedent for how joint operating agreements are interpreted and enforced across the global oil industry.
With the deal now closed, Chevron is poised to capitalize on its expanded portfolio, leveraging the immense potential of the Guyana discovery and other acquired assets to bolster its position in the competitive energy landscape. The next few years will reveal how effectively Chevron integrates Hess’s operations and realizes the anticipated growth and value from this historic acquisition.
