Chevron Completes Hess Acquisition, Securing Guyana Prize and Streamlining Global Portfolio

U.S. oil major Chevron has officially completed its long-awaited acquisition of Hess Corporation in a transformative all-stock deal valued at USD 53bn, or USD 61.1bn including debt. First announced in late 2023, the transaction closed in July 2025, following months of regulatory and legal delays, including a key arbitration ruling that cleared the path for Chevron to acquire one of Hess’s most prized assets: its stake in offshore Guyana.

Under the terms of the deal, Hess shareholders received 1.025 Chevron shares per Hess share, equating to a value of approximately USD 171 per share — a 4.9% premium to the pre-deal trading price. Chevron issued 301 million shares from its treasury to complete the transaction, while the 15.38 million Hess shares it had previously acquired were cancelled without compensation.

A central reason for the acquisition was Hess’s 30% stake in Guyana’s Stabroek Block, considered the largest offshore oil discovery of the last decade, with more than 11 billion barrels of recoverable oil equivalent. The deal had been stalled by ExxonMobil and CNOOC’s attempt to exercise a right of first refusal over the Guyana asset, but a favourable arbitration ruling confirmed that such rights did not apply to corporate-level M&A deals, allowing Chevron to proceed.

With the acquisition, Chevron also gains 463,000 net acres in the Bakken Shale in North Dakota, a mature, high-margin oil and gas basin that complements its existing U.S. shale portfolio. It further strengthens its position in the Gulf of America, where Hess assets currently produce approximately 31,000 barrels of oil equivalent per day, and adds natural gas operations in Southeast Asia, particularly in Malaysia and Thailand, generating around 57,000 barrels per day.

To sharpen its focus on core assets, Chevron has already begun streamlining its portfolio. Shortly after the Hess deal closed, it sold Hess’s 50% stake in Block A-18 of the Malaysia–Thailand Joint Development Area to Thai energy firm PTTEP for USD 450mn. This move aligns with Chevron’s strategy to concentrate resources on high-return, long-life assets like Guyana and the Bakken.

Chevron expects the acquisition to be accretive to free cash flow per share starting in 2025, supported by the launch of the fourth FPSO (Floating Production Storage and Offloading) vessel in Guyana. It also anticipates USD 1bn in annual cost synergies by the end of 2025 and plans to maintain capital expenditures between USD 19bn and USD 22bn annually. The deal extends Chevron’s production growth well into the 2030s and reinforces its ability to deliver strong returns to shareholders through dividends and share buybacks.

With this acquisition, Chevron not only secures some of the world’s most valuable upstream assets but also reinforces its long-term growth trajectory, positioning itself as a dominant force in the global energy sector.

 

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