© Reuters. Darren Woods, the chairman and CEO of Exxon Mobil Corporation, listens to Daniel Yergin, the vice chairman of S&P Global (not pictured), during the CERAWeek energy conference in Houston, Texas, U.S., March 7, 2023. REUTERS/Callaghan O’Hare/File Photo
By Sabrina Valle
HOUSTON (Reuters) -Exxon Mobil CEO Darren Woods on Monday said his company is trying to secure preemption rights over Hess Corp (NYSE:)’s Guyana assets in its dispute with Chevron (NYSE:), not buy the company itself.
In his first public remarks on the company’s pursuit of an arbitration case that could block Chevron’s $53 billion deal for Hess, Woods said Exxon would not have waited for Chevron to announce its Hess deal if it had wanted to buy Hess.
“We’re basically standing up for what we believe is a fundamental right,” Woods told Reuters. Exxon is trying to “secure and confirm the rights in that contract gives the existing partners.”
Exxon wants to “evaluate that value and do what is in the best interest of Exxon Mobil (NYSE:) shareholders, given the investments that we’ve made and all the work we’ve done to make that successful.”
Earlier this month, Exxon filed a contract arbitration claim over Hess’ proposed sale of its Guyana oil properties, a move that left open the prospect of an Exxon counterbid.
The arbitration case seeks to preserve Exxon’s right to determine the value of Hess’ 30% stake in the giant Stabroek offshore oil block.
Hess and Chevron have said they disagree with Exxon’s interpretation of the joint operating agreement that governs the Exxon, Hess and CNOOC (NYSE:) Ltd consortium responsible for all of Guyana’s oil production.
Chevron’s acquisition of Hess has been stalled by the U.S. Federal Trade Commission’s request for additional information on the merger. That request pushed back any closing to at least the middle of this year.
In remarks to a CERAWeek conference, Woods said he is not confident that carbon capture and storage will “necessarily come to the right solution.”
Exxon last year acquired Denbury Inc for $4.9 billion in a move that gave it a ready-made business to acquire and move carbon dioxide and bury it underground. U.S. tax credits for reducing planet-warming gases two years ago set off a race to build carbon capture sites.
In addition to Denbury, Exxon has spent tens of millions of dollars to acquire acreage off the coast of Texas to bury gases from its own petrochemical and others plants.
Carbon capture and storage works for high concentration streams of the gases, Woods said, but it is too expensive for low-concentration streams.
He also raised concerns about development of hydrogen gas, a fuel that generates no carbon emissions when burned, as a replacement for fossil fuels.
“There isn’t a lot of incentives” to drive low-carbon hydrogen fuel projects, he also said.
Governments have been promoting hydrogen as a clean fuel for power plants and transportation, providing tax credits and incentives for facilities that use solar and wind to produce hydrogen.
