- M&A
- July 18, 2025
- 4 minutes read
Chevron Closes $55B Hess Acquisition After Legal Battle
Chevron (NYSE: CVX), the American oil and gas giant, has closed its deal to acquire smaller rival Hess Corporation following…
Chevron (NYSE: CVX), the American oil and gas giant, has closed its deal to acquire smaller rival Hess Corporation following a legal battle with fellow American oil and gas giant ExxonMobil (NYSE: XOM).
- The legal battle stemmed from Hess’s existing joint venture with ExxonMobil in Guyana. The prized joint venture is the offshore Stabroek Block oil and gas reservoir straddling Guyana’s coast; it holds an estimated 11 billion barrels of recoverable oil, making it the largest oil discovery in decades.
ExxonMobil holds a 45% stake in the Stabroek Block joint venture, with Hess Corporation owning 30% and the China National Offshore Oil Corporation (CNOOC) owning the remaining 25%. ExxonMobil sought to block Chevron’s acquisition of Hess, claiming it had pre-emptive rights to buy Hess’s stake in the joint venture instead of Chevron.
ExxonMobil filed a case against Chevron with the International Chamber of Commerce (ICC) in March 2024. The International Chamber of Commerce recently ruled in Chevron’s favor, which eliminated the last regulatory roadblock to completing the Hess acquisition. Chevron has closed the deal and now owns Hess’s 30% stake in the Stabroek Block joint venture.
The Stabroek Block is currently the hottest asset in the global oil and gas industry. Production began in 2019 and averaged 183,000 barrels of oil per day in the first quarter of 2025. The ExxonMobil-led joint venture plans to increase production to 1.3 million barrels per day in 2027.
Guyana has leveraged the Stabroek Block to experience rapid economic growth. The country’s gross domestic product (GDP) growth rate averaged a remarkable 47% annually between 2022 and 2024, according to the International Monetary Fund (IMF). However, concerns persist about overreliance on oil and the risks of succumbing to the infamous “resource curse.”
- The “resource curse” is a paradox wherein countries with abundant natural resources experience poorer development outcomes than those with little natural resources.
- Tenets of the “resource curse” include abundant natural resources fueling corruption and rent-seeking by specific individuals and groups with ties to the government, currency appreciation making non-oil exports less competitive, and vulnerability to oil price fluctuations making long-term economic planning difficult.
Along with a 30% stake in the Stabroek Block joint venture, Chevron has also absorbed Hess’s oil and gas assets in the U.S. Permian Basin, Kazakhstan, the Eastern Mediterranean and Australia. Chevron initially agreed to pay $53bn in shares to acquire Hess in 2023. The deal later closed at $55bn, thanks to a slight uptick in Chevron’s share price.
