Chevron Beats Rival Exxon in Hess Battle. What It Means for Big Oil.

Chevron will be allowed to proceed with its purchase of Hess. (Justin Sullivan/Getty Images)

Chevron will be allowed to proceed with its $53 billion purchase of Hess after winning arbitration with rival Exxon, The Wall Street Journal reported Friday.

That means Chevron will assume Hess’s stake in a project in Guyana that is operated with Exxon. Exxon disputed the acquisition, arguing it has the right of first refusal to buy out Hess’s share of the field.

It’s a big win for Chevron. Buying Hess without the Guyana project would have wiped out the biggest upside from the deal. Chevron put out a statement Friday saying it had closed the deal for Hess just hours after the arbitration ruling was given.

“This merger of two great American companies brings together the best in the industry,” said Chevron CEO Mike Wirth. “The combination enhances and extends our growth profile well into the next decade.”

Exxon has a 45% stake in the Guyana project, which produces 650,000 barrels of oil a day. China’s Cnooc has a 25% stake. The companies aim to increase output from the project to 1.2 million barrels a day by 2027.

Chevron shares were little changed after the market opened after climbing 3.2% in the premarket. Hess rose 1.4%. Exxon shares slipped 1%. Oil stocks could also get a boost today from higher crude prices-West Texas Intermediate, the U.S. benchmark added 1.4% to $68.48 a barrel on Friday.

The arbitration was done through the International Chambers of Commerce in Paris, which handed down its decision Friday.

Chevron was a Barron’s stock pick in April.

Write to Brian Swint at brian.swint@barrons.com