HOUSTON, July 18 (Reuters) -

Chevron ( CVX ) will proceed with its

$53 billion acquisition

of Hess, CNBC reported on Friday, after it

prevailed in a landmark legal battle against larger rival Exxon

Mobil ( XOM ) to gain access to the largest oil discovery in

decades.

It is vindication for CEO Mike Wirth's strategy and a

critical win since Hess' most attractive asset is its stake in

the prolific Stabroek Block off the coast of Guyana that holds

more than 11 billion barrels of oil, a source of growth as

Chevron ( CVX ) works to turn around its lagging performance.

Exxon, which operates the Stabroek Block with a 45%

interest, and China's CNOOC, which holds 25%, filed arbitration

claims against their partner Hess last year, arguing they had a

contractual right-of-first-refusal to buy Hess' 30% interest in

the joint venture. Chevron ( CVX ) and Hess claimed the pre-emptive

right did not apply to the sale of the entire Hess company.

The claims from Exxon and CNOOC kicked off a legal battle

that delayed Chevron's ( CVX ) acquisition by at least a year and

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 likely centered on the interpretation of just

several words in the confidential joint operating agreement

between Exxon, Hess and CNOOC, experts told Reuters.

During a conference in May, an Exxon executive said the

company worked with Chevron ( CVX ) around the world and would do so in

Guyana if the arbitrators ruled against Exxon's claim.

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.

(Reporting by Sheila Dang in Houston and Arunima Kumar in

Bengaluru; Editing by Anil D'Silva)