Latest update April 3rd, 2026 12:35 AM
Hess, Chevron shareholders question stability of Stabroek Block deal as Guyanese ramp-up call for renegotiation
– but companies assure Guyana Govt. will honour contract as is
Kaieteur News – Following Chevron’s announcement that it is buying out Hess Corporation, giving it full control over Hess’s 30 percent interest in the Stabroek Block, a special conference call was held with shareholders to apprise them of the particulars of the deal.
During that call on Monday, shareholders acknowledged that indeed, Guyana is the best oil asset in the world. Be that as it may, they questioned the implications of the Stabroek Block Production Sharing Agreement (PSA) which has been heavily criticized for its lopsided provisions with citizens still demanding that there be a renegotiation.
In the past seven years, the Stabroek Block PSA has been heavily criticized for offering a mere two percent royalty for the exploitation of its resources along with a tax-free ride for Exxon and partners.
Chevron’s Chief Executive Officer and Chairman, Mike Wirth told shareholders that the Stabroek Block contract is secure and “has proven to be very stable through the years…obviously we’ve looked at that and believe it’s a good contract that is durable.”
Chairman of Chevron Corp., Mike Wirth (L) and CEO of Hess Corp., John Hess
CEO of Hess Corporation, John Hess also gave assurances of the contract as he noted that the leadership of Guyana has been very clear that they will honor the contract as is. “Contract sanctity is really important and foreign investments are really important. They’ve (government) been very clear with our joint venture that they want us to go as fast as we can to develop their oil into a financial resource that can help their country develop, and have a higher standard of living and shared prosperity for every Guyanese citizen,” the Hess official said.
Being acutely aware of the government’s position and support, Hess said “Guyana is a place where both Hess and now Chevron are very confident about investing further and look forward to attractive returns going forward.”
Chevron Corporation, one of the world’s largest oil companies, had announced that it will be buying out all the outstanding shares at Hess Corporation for US$53 billion, or US$171 per share.
Under the terms of the agreement, Hess shareholders will receive 1.0250 shares of Chevron for each Hess share. Taking this and other financial arrangements to follow, the full value of the transaction is US$60 billion.
Significantly, Chevron’s acquisition of Hess will give it exclusive control over a grand prize—30 percent of the working interest in Guyana’s Stabroek Block where over 11 billion barrels of oil resources have been unlocked. In that deepwater block which stretches a massive 6.6 million acres, ExxonMobil is the operator with a 45 percent working interest while China National Offshore Oil Corporation (CNOOC) holds 25 percent.
Since oil production commenced in December 2019 at the Stabroek Block’s Liza Phase One Project, Exxon successfully started another, the Liza Phase Two, in February 2022. Both projects are producing about 400,000 barrels of oil per day. Exxon and partners are also targeting over 1.2 million barrels of oil by 2027, making Guyana’s Stabroek Block, one of the world’s fastest-ever oil development hotspots.
Hess’ CEO is quoted on numerous occasions by this company, stating that the Stabroek Block has five government-approved projects, each of which will generate over US$1B in annual profits for his company.
In like manner, Chevron dubbed the Stabroek Block as “an extraordinary asset with industry leading cash margins and low carbon intensity that is expected to deliver production growth into the next decade.”
As a result of this deal, Chevron said it intends to recommend an increase to its first quarter dividend per share of 8% to US$1.63, which will be subject to the approval of the Chevron Board of Directors.
It also plans to increase share repurchases by US$2.5 billion to the top end of its guidance range of US$20 billion per year in a continued upside oil price scenario.
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