The path is clear for Chevron and Hess to complete its $53 billion merger that was announced in 2023, giving Chevron access to Exxon Mobil's crown-jewel of Guyana's oil-rich offshore zone.
An International Chamber of Commerce in Paris (ICC) arbitration panel ruled before the stock market open Friday in favor of Chevron and Hess. The decision dismissed Exxon Mobil's claim it has right of first refusal ahead of Chevron's takeover due to Hess's 30% in the offshore Guyana project which Exxon operates.
Following the ruling, Exxon Mobil released a statement saying it disagrees with the ICC decision but that it respects "the arbitration and dispute resolution process."
"As we've said before, Exxon Mobil and CNOOC are aligned that we had a duty to ensure contract terms are always adhered to and not set a bad precedent for ourselves and industry. 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 Mobil said.
"We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved," the company added.
Chevron appeared confident throughout the arbitration process that it would win the case. In Q1, the company acquired $2.2 billion of Hess stock. At the time, Chevron noted that this reflects "continuing confidence in the consummation of the pending acquisition of Hess."
The Guyana Possibility
The energy industry touts offshore Guyana, a resource pioneered by Exxon, as the largest oil discovery in the last 10 years.
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Exxon Mobil holds a 45% stake in Guyana's Stabroek block, the largest area under development. China's CNOOC International holds a 25% interest in the project with Hess holding a 30% stake. The Exxon-led venture has been drilling 18,000-foot-deep wells, with drillships working in water as deep as 8,900 feet.
Exxon Mobil's affiliate Esso Exploration & Production Guyana Limited is the consortium operator. The area off Guyana's coast reports estimated recoverable resources of more than 11 billion barrels of oil equivalent.
Guyana is expected to produce more than 1 million barrels per day (bpd) by 2026, according to industry projections.
CVX Stock Moves Higher; Oil Prices
Chevron stock advanced early before reversing down 0.9% to 149.97 during Friday's stock market action. Meanwhile, Exxon Mobil stock declined 3.5%. Collectively, the 22 stocks in the IBD-tracked Oil & Gas-Integrated industry group have advanced 1.4% in the 2025 stock market.
"We see this transformative project driving meaningful production growth for at least the next three to five years, adding substantial new heft on the liquids side from Guyana, the Permian, and Gulf of Mexico," CFRA analyst Stewart Glickman wrote Friday of Chevron's arbitration court win.
"CVX and XOM must now put this legal dispute behind them as partners in Guyana, with the focus turning to advancing planned development stages," Glickman added. " On a pro-forma basis, CVX significantly closes the production gap against XOM and materially increases crude oil exposure, in our view."
Both Chevron and Exxon Mobil report second-quarter earnings and revenue on Aug. 1. Analyst consensus has quarterly EPS declines of around 30% for both U.S. supermajors.
U.S. oil prices gained ground Friday, trading below $68 per barrel. Natural gas prices advanced about 1% to $3.58 per million British thermal units. Overall, West Texas Intermediate oil prices have declined around 7% this year. Meanwhile, U.S. natural gas prices have increased about 17%.
Meanwhile, the Organization of the Petroleum Exporting Countries, known as OPEC, reported earlier this week no change to the group's supply and demand outlook, with global oil demand growth this year and next at 1.29 million barrels per day and 1.28 million, respectively.
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Goldman Sachs analyst Dean Struyven on July 14 wrote that U.S. oil prices in the second half of 2025 are expected to be around $63 per barrel, up from his previous prediction of $57 per barrel. Meanwhile, Struyven sees oil prices trading around $52 per barrel in 2026 as OPEC+ continues to unwind its Covid-era oil production cuts.
Investors can keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Chevron stock has a 44 Composite Rating out of a best-possible 99. The stock also has a 42 Relative Strength Rating and a 49 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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