ExxonMobil expects more global support for Guyana, as Venezuela’s threats continue

CEO of ExxonMobil Darren Woods

Chief Executive Officer (CEO) of ExxonMobil Darren Woods has commented on the ongoing border controversy between Guyana and Venezuela, wherein the Spanish-speaking country is laying claims to the Essequibo region, where the oil major’s operations are located.

Appearing on a CNBC programme today, Woods was asked to weigh in on the intensified threats from Venezuela to Guyana’s territory and the risks it presents to ExxonMobil’s operations, where production stands at approximately 620,000 barrels of oil per day.

But Woods explained that long before ExxonMobil found oil (2015) and started production (2019), the border controversy between the two South American nations existed. He added that the border controversy case is currently before the International Court of Justice (ICJ) and that this process should be respected.

Specifically, Woods expressed that the situation “is a matter between nation States and the international community, it’s been ongoing, my expectation is that process will be respected.”

ExxonMobil currently has three Floating Production Storage and Offloading (FPSO) vessels operating in Guyana’s Stabroek Block in waters offshore. The current production figures will be further buttressed by the Yellowtail and Uaru developments which are already underway, anticipated to contribute 250,000 barrels of oil each following their respective start-ups.

An application for the sixth development, the Whiptail Project, was submitted by the Stabroek Block operator, ExxonMobil Guyana Limited (EMGL), and its co-venturers.
This project is currently under review by the government and once approved, will see Guyana producing just over 1.2 million barrels of oil per day by 2027.

Moreover, ExxonMobil and its partners continue to explore for more oil in Guyana’s waters.

In fact, in October 2023, the company announced the fourth offshore oil discovery in Guyana for the year at the Lancetfish-2 well, bringing the total number of discoveries from 2015 to date to 46.

The Lancetfish-2 discovery in the Liza Petroleum Production License area has unveiled an estimated 20 meters of hydrocarbon-bearing reservoir, along with approximately 81 meters of additional hydrocarbon-bearing sandstone.

According to the CEO, ExxonMobil will continue operations as per normal.

“From our perspective, we know what we need to do in country, develop those resources economically, environmentally responsibly, and do what we’ve been contracted to do, that’s what our organisation is focused on,” Woods asserted.

He further reasoned that should there be an escalation of Venezuela’s threats, Guyana is greatly supported by the international community. In this regard, he said ExxonMobil expects that such support is broadened.

“I’m not sure Guyana is standing on its own…you’ve all seen what happens when nations’ sovereignty are challenged, there are a lot of actions taken, I think the world and outside community have grown pretty sensitive to that, so my expectation is there’s more support, more broad support in the international community to make sure that the right processes are followed to resolve this [controversy].”

ExxonMobil has spent over US$280M on local suppliers for the first half of 2023, ExxonMobil Guyana President Alistair Routledge had told the media two months ago, adding that in excess of US$280 million was spent on Guyanese suppliers.

From 2015 to date, more than US$1.2 billion was spent with Guyanese suppliers, Routledge further revealed.

Esso Exploration and Production Guyana Limited (EEPGL), Exxon’s local subsidiary, is operator of the Stabroek Block, and holds 45 per cent interest thein, while Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.

However, Hess Corporation has entered into an agreement to merge with Chevron, and this transaction is expected to be closed in the first half of 2024.

Meanwhile, reports indicate that between January and June 2023, the Guyana Government earned US$705.2 million as revenue from its share of profit oil from two lifts that occurred in the final quarter of 2022, and seven of the eight lifts that occurred in the first six months of this year. The Guyana Government also earned US$110.8 million in royalties from 2022’s last quarter and from production and sales in the first three months of this year.