The arbitration case will preserve Exxon's right to potentially acquire Hess's 30% stake in the giant Stabroek offshore oil block, Senior Vice President Neil Chapman said in a conference on Wednesday.

Stabroek, which is consider the largest oil discovery in decades, is the prize in Chevron's bid for Hess. Exxon made clear for the first time it would bid for the assets if Chevron dropped its proposed $53 billion Hess purchase.

"I don't know if the Chevron transaction is going to proceed or not, that is in their hands," Chapman said. "If there is a transaction, we plan to exert our preemption rights" and bid for the Hess stake, he said.

Chevron did not immediately reply to a request for comment.

Exxon shares were up 1%, Hess shares fell 2%, and Chevron's stock was down a fraction, in mid-day trading.

Chevron and Hess have said they believe the preemption rights do not apply as the transaction would involve a merger that would keep Hess's Guyana subsidiary intact.

Exxon wrote the operating agreement that governs the partners' roles in the Stabroek block and is confident that the preemption rights apply, Chapman said.

It now holds a 45% stake in the consortium and operates all of its production. If it buys Hess's share, it would hold 75% of the block.

A contract arbitration case typically takes six months or more, he said.

"The preemption rights are to give us the opportunity to look at the value, which we can then match should we choose to do so," Chapman said at a Morgan Stanley event in New York.

The company has been negotiating with Chevron and Hess over the terms of its right of first refusal to any sale of Hess's Stabroek stake. It formally filed on Wednesday with the International Chamber of Commerce after failing to reach agreement, he said.

"We, as participant (in the block), have the rights to match a reasonable allocation of the value of the Hess transaction," Chapman said. "Disputes take place all the time, and they get resolved. The only real difference is this is in the public domain."

Exxon's arbitration filing raises the stakes for Chevron but also adds a new wrinkle to the largest U.S. oil company's $60 billion proposed purchase of Pioneer Natural Resources. That deal would make Exxon the largest oil producer in the top U.S. oil field.

(Reporting by Sabrina Valle)

By Sabrina Valle