FTC poised to greenlight Chevron’s $53 billion acquisition of oil rival Hess, sources say

By Sabrina Valle

(Reuters) – The U.S. Federal Trade Commission is expected to greenlight U.S. oil producer Chevron’s acquisition of Hess as soon as this week, two people familiar with the matter said, leaving Exxon Mobil’s challenge to the 53-year deal billions of dollars as the final hurdle.

The proposed merger was first announced last October, and the FTC sent a second request for information to Chevron two months later. Hess shares rose as much as 3 percent in after-hours trading Monday after the news.

Uncertainty over the deal’s completion has sent Chevron shares down 1 percent this year, compared with a 6.5 percent gain in the XLE energy stock fund.

Exxon and CNOOC Ltd, Hess’ partners in a joint venture in Guyana, are challenging the deal claiming a right of first refusal on any sale of Hess’ assets in Guyana, the prize in the proposed merger.

A three-judge arbitration panel is due to hear the case in May 2025. Chevron and Hess say they expect a decision by August, while Exxon expects it by September 2025.

The proposed stock purchase is one of the largest in a consolidating U.S. oil and gas industry, where several multibillion-dollar deals have been disclosed.

Chevron’s announcement of the Hess deal follows Exxon’s $60 billion acquisition of US shale giant Pioneer Natural Resources, which closed in May.

Two other mergers, Occidental Petroleum’s deal for CrownRock and Diamondback Energy’s bid for Endeavor Energy Resources, fell through even though they came after the Chevron-Hess combination.

The FTC required Exxon to withdraw its offer of a board seat to Pioneer Natural Resources CEO Scott Sheffield as a condition of its approval. The FTC alleged that it colluded with OPEC to reduce U.S. oil and gas production so it could raise oil prices.

Sheffield has denied the allegations and has asked the FTC to drop its ban on holding an Exxon executive seat.

An FTC spokesman declined to comment Monday.

EXXON ARBITRATION

The dispute over the terms of the contract governing the Exxon-CNOOC-Hess partnership is stalled until the second half of 2025. The Guyana consortium controls one of the world’s fastest-growing and most profitable oil provinces, with more than 11.6 billion barrels of oil and recoverable gas. findings from 2015.

Exxon operates all production in Guyana with a 45% stake in an offshore oil production consortium with China’s Hess and CNOOC as minority partners. The Guyanese trio’s combined earnings last year were $6.33 billion on revenue of $11.25 billion.

The information was first reported by CTFN, a provider of data and news for financial professionals.

(Reporting by Sabrina Valle and Jody Godoy; Writing by Gary McWilliams; Editing by Marguerita Choy and Stephen Coates)