Chevron's Declining Oil Reserves to be Supported by Hess' Guyana Asset

Core Insights - Chevron Corporation's oil and gas reserves have reached a decade low, emphasizing the critical nature of its planned $53 billion acquisition of Hess Corporation's stake in the Guyana oilfield [1] - The company's reserve replacement ratio (RRR) fell to -4% in 2024, indicating that reserves are depleting faster than they can be replenished [1][2] - Chevron's reserves decreased from 11.1 billion barrels of oil equivalent (boe) in 2023 to 9.8 billion in 2024, raising long-term output concerns among analysts [2] Reserve Replacement Ratio - Chevron's RRR has significantly declined over the years, averaging 88% over the past decade, with an organic replacement ratio of only 45% [2][3] - A RRR below 100% necessitates the acquisition of new assets to improve the ratio in the short term [3] Acquisition of Hess Corporation - Chevron aims to finalize the acquisition of Hess' 30% stake in Guyana's Stabroek block, which contains over 11 billion barrels of recoverable oil [4] - Successful completion of this acquisition would provide Chevron with a substantial presence in a highly productive oil region [4] Negotiation Challenges - The acquisition process is currently stalled due to Exxon Mobil and CNOOC, Hess' partners, claiming a right of first refusal on Hess' stake [5] - The outcome of these negotiations is critical and has significant implications for all parties involved [5]