Chevron prepares to get FTC green light for Hess bid

The Federal Trade Commission is expected to give Chevron approval for its $53 billion takeover of Hess Corp, Reuters reported, citing unidentified sources.

Chevron announced the planned acquisition last October as part of what has turned into a string of so-called megamergers in the oil space. Soon, however, the business ran into trouble when Hess Corp.’s partner. of Guyana contested the deal, arguing that it had a right of first refusal over Hess Corp.’s assets. in the South American nation.

In response, Chevron has signaled that the Guyana assets are at the heart of its acquisition and without them it may think twice about moving forward with the tie-up. Hess Corp. has 30% in the consortium developing Guyana’s Stabroek block. Exxon, the operator, has 45% and China’s CNOOC 25%.

Last month, Reuters again reported, citing unnamed sources, that the fate of the merger would be in the hands of an arbitration panel that would rule on the legitimacy of Exxon’s first-refusal argument, which Hess argued was irrelevant because the deal is not valid. represents an asset sale of its Stabroek Block stake, but an acquisition of the entire company.

The deal also faced a challenge from Congress, where Senate Majority Leader Chuck Schumer asked the Federal Trade Commission to stop the merger in May.

“I’m raising the alarm against another Big Oil merger proposal — a $53 billion deal between Chevron and Hess,” Schumer wrote on X in mid-May. “It would give Big Oil more fuel to raise gas prices. Trump may be hosting dinners for Big Oil executives, but the FTC should join consumers and end this deal,” the Senate majority leader wrote.

It has been a longstanding contention of Democratic lawmakers that consolidation in the energy space would lead to higher retail fuel prices. For these reasons, Democrats in Congress have attacked every major deal in the past two years as consolidation has gained momentum.

By Irina Slav for Oilprice.com

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