Chevron CEO Says $53B Hess Deal Closure Will Ease Uncertainty For Other Oil Deals

In an interview with Bloomberg on Friday, Wirth said the ruling by the International Chamber of Commerce in favor of Hess and Chevron is vital to the oil industry, where deal-making is essential for success.

Chevron CEO Mike Wirth thinks that the approval of the $53 billion deal with Hess Corp. will reduce the uncertainty prevailing in the oil industry.

Chevron’s shares were down 1.2% at the time of writing. Stocktwits data showed the retail sentiment around the stock was in the ‘neutral’ territory.

In an interview with Bloomberg on Friday, Wirth stated that the ruling by the International Chamber of Commerce (ICC) in favor of Hess and Chevron is crucial to the oil industry, where deal-making is essential for success.

“We have companies that come into this industry and people who build them, and the way they get rewarded is selling the company. It is in the nature of our industry that transactions are part and parcel with how it functions,” he said.

He added that the ICC’s ruling removes uncertainty where contracts used for partnerships could be used to “peel assets out of a corporate-level transaction.”

The ruling also helps Chevron address concerns about where its next phase of growth would come from – the Hess acquisition gives the American energy giant access to the Stabroek Block, which holds at least 11 billion barrels of oil equivalent.

This block is also among the largest discoveries in the past few decades.

Chevron prevailed against its larger rival Exxon Mobil Corp. (XOM), whose shares were down 3.1% at the time of writing.

Chevron’s stock is up 3% year-to-date, but down nearly 8% over the past 12 months.

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