Exxon-Hess arbitration panel incomplete, Hess sale to Chevron stalled
The third and final arbitrator has not been appointed, according to people familiar with the matter. A delay could mean no decision this year as Hess has forecast. Uncertainty on whether the sale can proceed has pressured Chevron shares, which are down 7.8% since the deal was disclosed.
"The precise dynamics ... will depend upon the rules of the arbitration," said Chris Strong, a partner at Vinson & Elkins law firm and also vice-president for model contracts of the Association of International Energy Negotiators. Chevron originally hoped to close the Hess acquisition by the first half of this year. Hess shareholders last month backed the proposed sale by a slim, 51% majority. The U.S. Federal Trade Commission has yet to weigh in on any antitrust questions.
In April, Hess said it wants the case heard by the third quarter and arbitration completed by year end. On May 9, Hess CEO John Hess asserted the final arbitrator would be appointed by May 17, according to proxy adviser Institutional Shareholder Services.
Exxon said the JOA it made on the Guyana assets was based on an industry model but declined to specify which model. Most of the industry used the 2002 model from the Association of International Energy Negotiators as a base, with some altered provisions, said Strong.
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