Exxon Mobil CEO says not trying to acquire Hess

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:HES)'s Guyana assets in its dispute with Chevron (NYSE:CVX), 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:XOM) shareholders, given the investments that we've made and all the work we've done to make that successful."

Hess and Chevron have said they disagree with Exxon's interpretation of the joint operating agreement that governs the Exxon, Hess and CNOOC 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 separate remarks at the CERAWeek conference in Houston, Woods raised concerns about the use of carbon capture and storage and hydrogen as a means of reducing greenhouse gas emissions. The U.S. has proposed rules that would finance projects that use solar and wind to create hydrogen instead of natural gas.

"The challenge has been translating the legislation of the IRA (Inflation Reduction Act) into regulation," Woods said. "There isn't a lot of incentives" to drive low-carbon hydrogen fuel projects, he said.

Woods said he is not confident that carbon capture and storage will "necessarily come to the right solution" and U.S. government financing for hydrogen generated from solar and wind leaves out projects that produce hydrogen from natural gas.

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.

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In addition to Denbury, Exxon has spent tens of millions of dollars to acquire acreage to bury gases off the coast of Texas 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 what he called low-concentration streams.