HOUSTON, Reuters Hess shareholders should vote in favor of Chevron39;s 53 billion allstock offer at the oil company39;s May 28 special meeting, proxy adviser Glass Lewis said on Thursday.

The proposed deal terms provide a reasonable valuation and offer the potential for upside to Hess shareholders, while the strategic and financial merits of the proposed merger are sound and reasonable, on balance, Glass Lewis said.

No. 2 U.S. oil producer Chevron last October offered to acquire rival Hess in a move to gain a foothold in oilrich Guyana39;s lucrative offshore fields, where Hess holds a 30 stake in a joint venture.

Hess39; partners in Guyana, Exxon Mobil and China39;s CNOOC, in March filed an arbitration case claiming a right of first refusal over Hess39;s Guyana assets. The arbitration has stalled the sale and surprised Chevron.

While the outcome of the arbitration is unclear, there is no guarantee Exxon and CNOOC would exercise preemption rights to Hess39;s stake in Guyana39;s giant Stabroek offshore field if they win their case, Glass Lewis said.

Exxon has said it would evaluate its options depending on the arbitration panel39;s decision, but would not rule out acquiring Hess39;s stake in the block.

Chevron could walk away from the purchase agreement without paying any compensation to Hess shareholders if Exxon and CNOOC win their arbitration case, Glass Lewis said.

GIANT OIL FIELD

The Exxon, Hess and CNOOC joint venture has discovered more than 11 billion…