Exclusive: Hess Guyana's secret value becomes part of Exxon arbitration, sources say

Sabrina Valle - Reuters - 20/08
An arbitration panel that will decide a high-profile clash between Exxon Mobil and Chevron will delve into the secret value of Hess' oil riches in Guyana, four people familiar with the matter said.
  • Panel to consider independent appraisal of Hess Guyana
  • Exxon sees Chevron-Hess merger as disguised asset buy, say sources
  • Hess Guyana makes up 70% of Chevron's $53 bln bid, say analysts
  • Chevron, Hess see appraisal as irrelevant to arbitration case
Aug 20 (Reuters) - An arbitration panel that will decide a high-profile clash between Exxon Mobil (XOM.N), opens new tab and Chevron (CVX.N), opens new tab will delve into the secret value of Hess' (HES.N), opens new tab oil riches in Guyana, four people familiar with the matter said.
Chevron (CVX.N), opens new tab last October offered to pay $53 billion for Hess, one of the two biggest deals in the largest wave of consolidation in the oil industry in decades. The asset most coveted by Chevron in the takeover is Hess’s stake in a Guyana field operated by top U.S. rival Exxon.
Exxon and China's CNOOC (0883.HK), opens new tab, another partner in the venture, have challenged the deal, claiming a contractual first right to buy Hess’s stake in the field, a matter to be decided by a three-person arbitration panel.
Getting the panel to consider the appraised value is central to Exxon's claim that the deal is an asset acquisition disguised as a merger. Exxon believes the Guyana asset is so valuable that the merger would trigger a change of control and give Exxon and CNOOC a right of first refusal to the asset sale, the people said.
On the other hand, Chevron and Hess do not believe the Guyana valuation will have any bearing on the panel's view of the contract arbitration. Their position is Exxon's right does not apply because there is no change in Hess' control of its Guyana unit, people familiar with their thinking said.
Valuation can be a critical and lengthy step in change of control disputes, said Christopher B. Strong, a vice president at trade group Association of International Energy Negotiators (AIEN) and a partner at Vinson & Elki...
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