Chevron Warns That Its Pending $53 Billion Deal for Hess Corp. May Be in Jeopardy Over Key Asset in Guyana

Chevron warned Monday that its pending $53 billion acquisition of Hess may be in jeopardy because it will require the approval of Exxon Mobil and a Chinese national oil company, which both hold rights to development of an oil field off the coast of the South American nation Guyana.

The disclosure in a filing with the Securities and Exchange Commission raised investor qualms, depressing shares of both Chevron and Hess. Chevron’s stock price fell 3% Tuesday morning before rebounding; Hess stock lost 4% of its value but bounced back slightly.

Chevron’s acquisition of Hess would add this major oil field in Guyana as well as shale properties in the Bakken Formation in North Dakota. Guyana is a country of 791,000 people that is poised to become the world’s fourth-largest offshore oil producer, placing it ahead of Qatar, the United States, Mexico and Norway. It has become a major producer in recent years, with oil giants including Exxon Mobil, China’s CNOOC, and Hess squared off in a heated competition for highly lucrative oil fields in northern South America.

Read the source article at ABC News