What caught my attention is The International Chamber of Commerce ruled in Chevron's favor in a dispute with Exxon over Hess' Guyana oil assets.
Chevron's victory s the way for its $53 billion acquisition of Hess to close. The dispute had created significant uncertainty for Chevron, weighing on its stock performance.
In this articleXOMCVX your favorite stocksCREATE FREE ACCOUNTwatch now4:0904:09Chevron prevails in mediation over Exxon in Guyana oil assetsSquawk BoxChevron has its $53 billion acquisition of Hess, after prevailing against Exxon Mobil in a legal dispute over offshore oil assets in the South American nation of Guyana (noteworthy indeed).
Nevertheless, The ruling by the International Chamber of Commerce is a huge win for Chevron, which had sought to buy Hess to gain access to the vast Guyana oil reserves.
"We have maintained from the beginning that this is the outcome that we expected.
It's a straightforward interpretation of contract language, and we're very pleased that the transaction has now closed," said Chevron CEO Mike Wirth on CNBC's "Squawk on the Street" on Friday.
Additionally, "Good for Chevron and also good for the industry because it affirms a long-standing practice that asset level rights of refusal don't apply in corporate level M&A transactions.
Furthermore, "Exxon CEO Darren Woods first revealed the dispute's outcome to CNBC's Becky Quick earlier Friday (this bears monitoring), given current economic conditions.
Furthermore, Chevron s were almost 1% lower on Friday. They had risen more than 2% in the premarket on the announcement. Exxon stock, meanwhile, fell more than 3%.
"We disagree with the ICC panel's interpretation but respect the arbitration and dispute resolution cess," Exxon said in a statement Friday, in today's market environment.
The dispute had created significant uncertainty over whether Chevron's acquisition of Hess would close, weighing on Chevron's stock performance.
Nevertheless, The transaction would have failed if Exxon had prevailed. Exxon and China National Offshore Oil Corp (noteworthy indeed).
Had filed an arbitration case with the ICC, claiming a right of first refusal over Hess' assets in the Stabroek Block, an oil development off the coast of Guyana.
Hess has a 30% stake in the oil patch, while Exxon leads the ject with 45% and CNOOC maintains 25%.
However, Conversely, "We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved," Exxon said, in today's financial world.
As the combination moves ahead, Wirth told CNBC said he anticipates "some" headcount reductions.
Chevron had already been reducing staff, after announcing in February plans to lay off 15% to 20% of its workforce in an effort to cut costs. "We'll integrate the two companies.
As is typical in a deal this, there are some overlaps, and so you'll see some reductions," Wirth said (an important development).
"But our industry is many others where you have to continually look to be efficient, and nology evolves. In contrast, It's a competitive world out there.
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