Chevron acquires Hess, becomes major player in Guyana’s oil sector
US oil and gas giant Chevron announced that it is entering the Guyanese petrochemical market as it has purchased Hess Corporation.
In a statement, Chevron said the all-stock transaction is valued at $53 billion and gives the company an enterprise value, including debt, of $60bn.
Chevron said the transaction gives them 30 per cent ownership in the Stabroek Block, which has more than 11 billion barrels of oil equivalent. ExxonMobil and China National Offshore Oil Corporation hold the remaining shares in the 6.6 million acre offshore oil reservoir on Guyana's Atlantic coast.
Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share.
“The acquisition of Hess upgrades and diversifies Chevron’s already advantaged portfolio. The Stabroek block in Guyana is an extraordinary asset with industry-leading cash margins and low carbon intensity expected to deliver production growth into the next decade,” Chevron stated.
Mike Wirth, Chevron Chairman and CEO, commented: “This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets.”
“Importantly, our two companies have similar values and cultures, focusing on operating safely and with integrity, attracting and developing the best people, making positive contributions to our communities and delivering higher returns and lower carbon.”
John Hess, Hess Corporation CEO, said: “This strategic combination brings together two strong companies to create a premier integrated energy company.”
“I am proud of our people and what we have achieved as a company, which has one of the industry’s best growth portfolios, including Guyana, the world’s largest oil discovery in the last ten years, and the Bakken shale, where we are a leading oil and gas producer. Chevron has a world-class diversified portfolio of assets and one of the industry’s strongest balance sheets and cash return profiles. I believe our strategic combination creates a company that is stronger in every respect, with the leadership, asset portfolio and financial resources to lead us through the energy transition and deliver significant shareholder value for years to come.”
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