Chevron to Exit Hess Midstream in Bakken Cost-Cutting Move

Chevron is restructuring its midstream operations in the Bakken shale basin by divesting its stake in Hess Midstream and related crude oil assets in the DJ Basin. The move aims to cut transportation and processing costs by about 50%, significantly improving earnings and returns from the region. Under the deal, Chevron will transfer its ownership interests and general partner position in Hess Midstream, along with its DJ Basin assets, in exchange for $200 million in cash and better commercial terms for its Bakken operations.

The transaction is expected to boost Chevron's return on capital employed by 0.5 percentage points and remove approximately $3.7 billion in Hess Midstream debt from its balance sheet. However, Chevron will record a one-time after-tax loss of $3 billion to $4 billion due to accounting rules that prevent recognizing future cost savings as an asset. The restructuring follows Chevron's acquisition of Hess Corporation in July 2025, which expanded its upstream portfolio and increased combined production in the Bakken and DJ Basin to around 600,000 barrels of oil equivalent per day.

The deal is part of Chevron's broader portfolio rationalization efforts, which included selling interests in various international and U.S. midstream assets in 2025. The company plans to maintain Bakken production through technological and operational improvements, while Hess Midstream will operate independently post-transaction. The deal is subject to regulatory approvals and is expected to close by the end of 2026.