Hess shareholders approve Chevron deal, Exxon dispute lingers

Hess (HES) shareholders have approved the company's $53 billion merger with Chevron (CVX). But one issue still needs to be resolved. ExxonMobil (XOM) is claiming a right of first refusal over assets in Guyana, which it shares ownership of with Hess and China's CNOOC.

Yahoo Finance's Alexis Keenan breaks down the fight and what to watch from ExxonMobil's shareholder meeting later Wednesday.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts. Be sure to check out what ExxonMobil CEO Darren Woods told Yahoo Finance about the Guyana assets here.

This post was written by Stephanie Mikulich.

Video transcript

Let's continue the conversation surrounding energy Exxon claiming a right of first refusal over hes's lucrative assets in Guyana ahead under a joint operating agreement.

Yahoo finances legal reporter, Alexis Keenan is here with the latest on that.

Alexis.

Hi.

Yes.

So this announcement by hess that its shareholders say ok to this deal, that's raising a problem.

It's rearing ahead of a problem that was already there and that is Exxon's rights over this Guiana Coast oil Reserve area, this very lucrative oil reserve area.

Now Exxon has about 45% share in that particular asset he at 30% and then a China state owned company owning 25%.

And so what Exxon is saying is that its majority of stake that gives them the right to counter whatever Chevron would be offering for hess's stake.

So back in March, Exxon had already filed for arbitration of this matter.

So the thinking is that this could delay any perspective deal here.

Alexis Exxon is also facing a high state shareholder vote uh meeting later today when it comes to the future of its CEO some of those board of directors, what are the implications of the shareholder meeting and what happens with the vote either way.

Yeah, so we don't know what's gonna happen with the vote, but it's a big deal.

Lots of eyes on this and look, there's a rift between the company and its stakeholders and major stakeholders are now getting involved.

Now this rift started back when the company wanted to block the activist shareholders, Juno Capital, as well as follow this trying to submit these proposals for environmental steps.

And these are steps that other major US Western companies have taken.

Exxon is the only one who has not gone in this direction.

And the SEC allows for these activist shareholders, any shareholders to bring these proposal three times.

It's sort of a three time strike you out.

So there are two different attempts at getting these proposals in front of shareholders for a vote and the company is pushing back, they filed suit against the shareholders and that is a bit unprecedented.

And so that is the fight here.

And so you have major stakeholders, Calpers, the US s largest public employee pension fund, $1 billion stake in the company, putting its weight into the mix here and saying we want all of the directors gone and we want Ceo Darren Woods gone too.

So that is what investors are going to be looking at here is this decision of whether any of them, all of them are going to get to stay.

But certainly this issue is coming.

To a head uh environmental proposals perhaps less prevalent than they were in the past few years.

But still an issue and shareholders want to have their say.