HOUSTON, June 20 (Reuters) - A contract arbitration

panel that could block or green-light the $53 billion sale of

Hess Corp ( HES ) to Chevron ( CVX ) remains incomplete three

months after the case was filed, stalling a decision on whether

Exxon Mobil ( XOM ) has a right of first refusal over Hess'

Guyana operations.

The third and final arbitrator has not been appointed,

according to people familiar with the matter. A delay could mean

no decision this year as Hess has forecast. Uncertainty on

whether the sale can proceed has pressured Chevron ( CVX ) shares, which

are down 7.8% since the deal was disclosed.

Each side in the dispute appoints one arbitrator and those

two nominate the third, according to the people. The

International Chamber of Commerce (ICC), parent of the

arbitration panel, did not reply to requests for comment on the

timeline for appointing the third arbitrator or for deciding the

case.

Hess said "the arbitration is moving forward and we expect

to have a decision by the end of 2024." But lawyers who have

been involved with international arbitrations say timing varies

for such decisions.

"The precise dynamics ... will depend upon the rules of the

arbitration," said Chris Strong, a partner at Vinson & Elkins

law firm and also vice-president for model contracts of the

Association of International Energy Negotiators.

Generally, he said, if two arbitrators "are unable to agree

on a third arbitrator within a certain period of time, they can

apply to the administering authority, if there is one".

"The market is hoping that there is a speedy settlement to

the arbitration process, but has never understood properly what

Exxon is trying to achieve," said Mark Kelly, an analyst with

financial firm MKP Advisors. "It is widely believed that Exxon

has never communicated this to even Chevron ( CVX ) or Hess."

Chevron ( CVX ) originally hoped to close the Hess acquisition by

the first half of this year. Hess shareholders last month backed

the proposed sale by a slim, 51% majority. The U.S. Federal

Trade Commission has yet to weigh in on any antitrust questions.

The deal would give Chevron ( CVX ) a 30% stake in a Guyana oil

consortium that has found at least 11 billion barrels of oil and

continues to plumb a 6.6 million-acre (26,800 sq km) block. The

group has forecast output of 1.3 million barrels per day by

2027.

Chevron ( CVX ), Exxon and Hess declined to estimate timing of

an appointment to the panel, which will consider Exxon's claim

that Chevron ( CVX ) is trying to circumvent its preemption right

included in the Guyana oil consortium's joint operating

agreement (JOA). Exxon is the group's majority owner with 45%,

Hess has a 30% stake and CNOOC 25%.

Chevron ( CVX ) said Exxon's right of first refusal does not apply

to a sale of the entire Hess company.

Exxon and Hess have declined to comment on the precise

language of the JOA, a confidential document.

In April, Hess said it wants the case heard by the third

quarter and arbitration completed by year end. On May 9, Hess

CEO John Hess asserted the final arbitrator would be appointed

by May 17, according to proxy adviser Institutional Shareholder

Services.

Exxon CEO Darren Woods has said he expected the dispute

would slip into 2025.

LANGUAGE OR INTENT?

Exxon executives have been saying the arbitrators should

consider the "intent" behind the JOA made with its original

partner in Guyana, Shell PLC ( SHEL ), which sold its stake before oil

was discovered there in 2015.

"We wrote the JOA, so we have a pretty clear line of

sightness to the intent and the circumstances that apply," CEO

Woods said after first quarter earnings, on April 28. "That is

the point of the arbitration."

The intent was key in a 2017 right of first refusal case in

which Exxon was targeted in Canada by energy firm Northrock

Resources, says Mohamed Amery, a partner at Canadian law firm

Linmac LLP. Exxon ultimately won the right to sell those assets.

"When the court looks at the interpretation of a clause

within a contract, it doesn't read it in its black and white, it

looks to what the discussions were between the parties," Avery

said.

Exxon said the JOA it made on the Guyana assets was based on

an industry model but declined to specify which model. Most of

the industry used the 2002 model from the Association of

International Energy Negotiators as a base, with some altered

provisions, said Strong.

Different valuations of the Guyana asset could play a role

if Exxon prices Hess Guyana stake above the $53 billion offered

by Chevron ( CVX ) for Hess Corp. ( HES ) The parties declined to disclose their

valuations.

Generally speaking, the question of right of first refusal

"hinges on the specific wording of the JOA and on the value of

the asset in relation to the larger change of control

transaction," said Strong.