Exxon to halt Mars crude purchases until zinc contamination fixed, sources say
Zinc contamination in the Mars crude oil stream has pushed down demand and slashed prices for the flagship crude oil produced off the U.S. Gulf coast, sources said earlier this week.
Mars traded at a 10-cent premium on Thursday to crude oil at the Cushing storage hub in Oklahoma, dealers said.
It had eased to 10-cent discount earlier in the week compared with a $1 premium at the end of June.
Exxon did not respond to requests for comments.
Zinc does not typically occur naturally in crude oil and running crude with zinc could lead to damage to refining units and catalysts used in processing oil.
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Reuters
12 minutes ago
- Reuters
Chevron clinches Hess acquisition after winning Exxon legal battle
HOUSTON, July 18 (Reuters) - Chevron (CVX.N), opens new tab can quickly proceed with its $53 billion acquisition of Hess (HES.N), opens new tab, after winning a landmark legal battle against larger rival Exxon Mobil (XOM.N), opens new tab, gaining access to the largest oil discovery in decades. Chevron CEO Mike Wirth's strategy to turn around his company's lagging performance hinges on the acquisition, one of the largest energy deals in the past decade. The prize is a stake in the prolific Stabroek Block off the coast of Guyana that holds more than 11 billion barrels of oil and is one of the fastest growing oil provinces in the world. Shares in Chevron rose 3% in premarket trading, while those of Hess jumped 7%. Exxon shares were marginally lower. Exxon and China's CNOOC, Hess' partners in Guyana, had filed arbitration disputes that claimed they held a pre-emptive right to purchase Hess' stake, which delayed Chevron's closure of the Hess acquisition for over a year. "We disagree with the International Chamber of Commerce (ICC) panel's interpretation but respect the arbitration and dispute resolution process," Exxon said in a statement. "Given the significant value we've created in the development of the Guyana resource, we believed we had a clear duty to our investors to consider our preemption rights to protect the value we created through our innovation and hard work at a time when no one knew just how successful this venture would become," the company added. There is no appeals process at the International Chamber of Commerce, the court that oversaw the arbitration case. Chevron, Hess and CNOOC did not immediately respond to Reuters' requests for comment. Even as it awaited the arbitration verdict, Chevron was making preparations so it could close the deal with Hess within 48 hours of resolving the arbitration and complete other operational tasks within 45 days, Reuters previously reported. Information technology workers from Chevron and Hess have met regularly to plan the integration, and Hess employees were informed that they could request a severance package following the deal's close. The claims from Exxon and CNOOC had kicked off a lengthy legal battle that captured the attention of the global oil industry, shareholders, and attorneys who craft joint operating agreements that govern oil partnerships around the world. The dispute centered on the interpretation of just several words in the confidential joint operating agreement between Exxon, Hess and CNOOC, experts have told Reuters. CNBC, which first reported the news of Chevron's win, cited an interview with Exxon CEO Darren Woods, who said the company was examining the ruling to determine whether to make provisions in contracts to ensure they prevail in future disputes. CNBC also reported Woods said that Exxon's relationship with Chevron in other projects around the world was fine throughout the arbitration proceedings. "This was never a Chevron thing. This was more about getting the contracts enforced the way they were intended," Woods told CNBC. The fight illustrates the value of the Stabroek Block, which drove profits for the Exxon-led consortium that controls all of its oil output, transformed Guyana into one of the world's fastest-growing economies and still has potential for further oil discoveries. Hess' earnings from Guyana rose to $3.1 billion last year from $1.9 billion in 2023. Chevron's adjusted earnings last year totaled $18.3 billion, down from $24.7 billion in 2023.
Reuters
12 minutes ago
- Reuters
Exxon vs. Chevron battle sets stage for oil industry's race for prize assets
LONDON, July 18 - The high-stakes clash between Exxon Mobil and Chevron over a prized South American oilfield may be a sign of what's to come in the oil and gas industry as competition for a shrinking pool of prime assets heats up. Chevron (CVX.N), opens new tab is set to finalize its $53 billion acquisition of U.S. rival Hess (HES.N), opens new tab after the companies prevailed in a legal dispute with Exxon (XOM.N), opens new tab over Hess' 30% stake in Guyana's fast-growing Stabroek oil block. The ruling by the Paris-based International Chamber of Commerce marks a key win for Chevron CEO Mike Wirth, who targeted the Hess acquisition to grow the company's production and keep pace with larger rival Exxon's rapid expansion. The Hess deal, announced in October 2023, was delayed after Exxon, which holds a 45% stake in Stabroek, and the field's third partner CNOOC argued that they had a contractual right of first refusal to purchase Hess's stake in the block. In fact, the multi-billion-dollar dispute hinged on the interpretation of a single sentence in the joint operating agreement. Exxon's decision to file this arbitration was likely motivated by a desire to hamper the growth strategy of its key U.S. rival, the latest move in a decades-long rivalry that has helped shape the U.S. energy sector. Stabroek is a highly attractive asset, with 11 billion barrels of oil reserves and production costs of only around $20 a barrel, among the lowest in the world, according to consultancy Rystad Energy. The Guyanese field's production has soared from zero in 2019 to 668,000 barrels per day by the end of March 2025, and is forecast to nearly double to 1.3 million bpd by the end of 2027. Exxon and Chevron both trace their roots to Standard Oil, the conglomerate formed by John D. Rockefeller in 1870 that came to dominate the American oil industry before being broken up by the U.S. government in 1911. In the past decade, the two majors have competed fiercely for dominance in U.S. shale oil. Chevron had an early advantage given its ownership of large swathes of land in the Permian basin, the shale heartland. But Exxon regained ground in 2010 with its $41 billion acquisition of natural gas producer XTO. It then cemented its position as the largest U.S. producer in October 2023 with its acquisition of U.S. shale producer Pioneer Natural Resources for $60 billion. Chevron responded quickly, however, announcing that it had agreed to acquire Hess only 12 days after Exxon's Pioneer deal. The Hess deal should help Chevron keep pace with Exxon moving forward. Chevron's production is now expected to exceed 4 million bpd by 2030 from 3.4 million bpd in the first quarter of 2025. By contrast, Exxon expects its output to grow from 4.5 million bpd in the first quarter to 5.4 million bpd by the end of the decade. Oil and gas companies are facing a future with limited options for building reserves as the unexplored frontier shrinks and shareholders push for cost control. These firms replenish their reserves not only to grow output but also to offset existing fields' natural decline. Depletion has been a major problem for Chevron, whose reserve replacement ratio slid to negative 4% last year, with reserves falling to their lowest point in at least a decade at 9.8 billion barrels, according to LSEG data. That's the equivalent to 8 years of production, down from 10 years in 2023, and compared with Exxon's 12 years in 2024. Reserves can be increased either through exploration, a high-risk, high-reward activity, or by acquiring assets and companies. Energy giants have invested billions in exploration over the decades, which has led to the discovery of resources in new basins such as the North Sea, Angola, Brazil and Indonesia. But this activity has slowed in recent years as companies have sought to cut spending to appease shareholders. Moreover, there are fewer accessible fields to tap. Although the world holds vast oil and gas reserves, sufficient to supply around 50 years of current oil consumption, not all resources are created equal. First, many resources are simply far too expensive to develop because of depth, complexity or remoteness. Additionally, over two-thirds of the world's oil reserves are located in countries where Western companies have restricted access. This includes Iran, Venezuela and Russia as well as OPEC countries whose strict terms make operations less attractive for foreign investors. This all explains why the discovery of enormous, low-cost oil resources in Guyana a decade ago was considered such a boon for Western energy companies – and why the two biggest U.S. producers were willing to spend billions battling for access to a single field there. The latest high-profile clash between Exxon and Chevron may be an indication of what the industry can expect in the coming years as competition for low-cost resources intensifies amid the world's transition away from fossil fuels. No one knows exactly when global oil demand will peak. While the International Energy Agency, the global energy watchdog, expects oil consumption to crest by the end of this decade, OPEC forecasts demand to grow into 2050. But, regardless, the industry appears to be going through a shift, and the Exxon-Chevron clash, one of the most expensive and consequential legal battles in the sector's history, may be a harbinger of things to come. (The opinions expressed here are those of the author, a columnist for Reuters.) Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab
BBC News
12 minutes ago
- BBC News
Bill cutting foreign aid and public broadcasting passes US House
The US House of Representatives has passed a bill allowing Congress to claw back billions in pre-approved funding for public broadcasting and foreign bill, which will see the government cut $9bn (£6.7bn) in total, was passed in a 216 to 213 vote just hours after midnight on Friday. All Democrats and only two Republicans voted against the US Senate passed its version of the bill less than 24 hours bill now heads to President Donald Trump's desk to be signed into law. "THIS IS BIG!!!", he wrote on social media after the vote. Republicans have said the rescissions package, a political tool to cut funding already approved by Congress, is likely to be the first of many."This isn't the end, it's the beginning," House Speaker Mike Johnson said after the bill was victory for Republicans and President Trump is the latest development in their ongoing effort to shrink government spending."Nine billion dollars is a good start," House Majority Leader Steve Scalise approved funding cuts include large reductions to the Corporation for Public Broadcasting, which includes PBS and also includes cuts to the US Agency for International Development (USAID), the largest US global humanitarian programme. The spending cuts, however, were slightly smaller than Trump had originally proposed. In the Senate version of the bill, lawmakers voted to keep $400m in the budget for Pepfar, a global Aids prevention programme, bringing the proposed cuts from $9.4bn to $ bill faced a bit of a rocky path on its way through the House and Senate, with lawmakers on both sides of the isle wary of cuts to foreign aid and public the day the Senate passed its version of the bill, people in Alaska were told to tune into their local radio station that includes NPR programming after an earthquake that struck off the coast prompted tsunami warnings."Public radio is a lifeline, connecting rural communities to the rest of the nation, and providing life-saving emergency broadcasting and weather alerts. It cannot be replaced," NPR President Katherine Maher said after the Senate passed the to US media, this rescissions package was the first to succeed in over 30 years.
