Chevron Signals Confidence in Hess Merger with Stock Purchase

What Happened?

Chevron purchased nearly five percent of Hess Corporation’s common stock this year. It signals Chevron’s confidence that the proposed merger with Hess will be completed as planned. 

U.S. regulators have approved the proposed merger, but rival Exxon Mobil has challenged it in court. 

Between January and March of 2025, Chevron bought 15,380,000 shares of Hess stock valued at $2.3 billion. By making such a large purchase, Chevron was able to get the shares at a discounted rate. 

One Hess investor described the buys as, “a smart and savvy move on their part.” 

Why it Matters

Roy Behren, co-president of Westchester Capital, a Hess investor, told Reuters he’s confident the acquisition will go through according to plan. Mr. Behren also pointed out that even if it doesn’t, it will still have an indirect interest in the Stabroek field through its purchase of Hess stock. 

In 2023, Chevron announced plans to acquire Hess, which would give Chevron exposure to Guyana’s considerable offshore oil reserves. The oilfields are located offshore in the Guyana-Suriname Basin of the Atlantic Ocean, specifically within the Stabroek Block, and contain an estimated eleven billion barrels of untapped oil. 

Chevron chief financial officer Pierre Breber said in 2023 “With greater confidence in projected long-term cash generation, Chevron intends to return more cash to shareholders with higher dividend per share growth and higher share repurchases.” 

Guyana, a small country located in the northeast portion of South America with a population of about 800,000, has experienced an oil boom in the past several years. 

The discovery of major offshore oil deposits in 2015 led to rapid drilling by Exxon Mobil. It has generated over two billion dollars for Guyana, a sum much larger than it’s used to handling. The newfound wealth has transformed portions of the country with new buildings and infrastructure.

But the Chevron-Hess merger has been delayed due to legal proceedings initiated by Exxon Mobil, who claimed the right of first refusal. Chevron and Hess argued the merger is not an asset acquisition deal, so first refusal doesn’t apply. Exxon disagreed and the matter has been stuck in court and arbitration for some time.

The new buys of Hess stock in 2025 by Chevron indicate they think the remaining legal hurdles to the merger with Hess will be cleared.

How it Affects You

With global oil demand projected to continue increasing over the next decade, the hunt to find new sources to develop has also heated up. 

Countries like Guyana are likely to continue finding themselves at the intersection of transnational corporations seeking profit, the opportunity to benefit from new developments, and a global effort to reign in the oil industry on environmental grounds.