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illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg or enjoy below:
🗞️ Driving the news: Arbitrators announced a delay in resolving the dispute between Chevron and Exxon Mobil over a $1 trillion oil field in Guyana, pushing the decision to next year
• This delay affects Chevron’s $53 billion acquisition of Hess Corp., which holds a 30% stake in the Guyana field
• Meanwhile, Exxon reported strong earnings, benefitting from its $60 billion acquisition of Pioneer Natural Resources
🔭 The context: The conflict centers on Exxon’s right of first refusal over Hess’s stake, which Chevron argues doesn't apply due to the deal being structured as a corporate merger
• The outcome is pivotal as Guyana’s oil production costs are below $35 a barrel, making it extremely profitable
🌍 Why it matters for the planet: The focus on low-cost crude production highlights Big Oil’s strategy to secure cheap, resilient fossil fuel supplies amidst the energy transition, emphasizing the industry's shift away from diversification into renewables
⏭️ What's next: The arbitrators' decision will shape the future dynamics of oil production in Guyana and influence market positions of both Chevron and Exxon
• The industry’s approach to acquisitions and low-cost production will continue to evolve as it navigates climate strategies and energy market fluctuations
💬 One quote: “That time has now passed,” said Chevron CEO Mike Wirth, indicating the end of compromise talks between Chevron and Exxon
📈 One stat: Guyana’s oil can be pumped for less than $35 a barrel, positioning it as one of the most profitable crude sources outside OPEC
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