ExxonMobil to drill 7 new wells this year

President of ExxonMobil Guyana Alistair Routledge

US oil major ExxonMobil has announced plans to drill and appraise at least seven new wells within the Stabroek Block in 2024, including two within the western boundaries of the oil field. The two wells are the Trumpetfish and the Redmouth.

Five of the wells are expected to guide the company in assessing the quantity and usability of the natural gas reserve in the Stabroek Block, particularly the eastern portion.

Addressing a press conference on Tuesday, ExxonMobil Guyana President Alistair Routledge said if the wells lead to commercially viable resources, the company could drill additional wells in the area.

These activities, especially the planned exploration west of the Essequibo River, raise questions about the US oil major’s posture towards the threats coming from Guyana’s western neighbour, Venezuela.

In responding, Routledge reiterated that the company remains dedicated to its Guyana operations, expressing that, “we remain committed to Guyana and pursuing business here and delivering on the commitments we’ve made…”

“We believe that the contract that we have with the country is valid under the local law…also under international law, we have valid rights to the blocks in which we’re participating and the issue between countries needs to be dealt with, as it is being done between the government between the two countries,” he further told media operatives.

Routledge referred to the Argyle Declaration and expressed optimism about the agreements reached between Guyana and Venezuela, particularly the commitment from both sides to not use force or issue threats of force to resolve the ongoing border controversy.

The ExxonMobil President also spoke about Guyana’s ongoing partnerships with the US and other nations, noting that such collaborations are “healthy”.

“I think the collaboration that we’re seeing for Guyana with other countries on the military front as well as on the diplomatic and economic front reflects…I think it’s a healthy thing, I think it’s good for the western hemisphere that we see those collaborations and hopefully, it will continue,” Routledge stated.

In recent times, Guyana has been boosting its defence capabilities through several initiatives including robust engagements with global partners, including the US.

Most recently, United States Southern Command (SOUTHCOM) Air Force Commander, Major General Evan Pettus visited Guyana where fruitful discussions were had on several security matters, including with the Guyana Defence Force (GDF) on its air domain awareness and collaboration on advancing Guyana’s airspace awareness capacity.

During a media briefing on Friday last following his engagements with Guyanese officials, the Commander of the Air Force arm of SOUTHCOM was questioned about the steps taken to counter the narrative being peddled by Venezuela that the US was setting up a military base in Guyana.

“That’s an interesting rumour. It’s not one that I’m aware has any foundation,” Major General Pettus had stated.

According to the Air Force Commander, the US military, especially through SOUTHCOM, has had a strong bilateral security partnership with Guyana, dating back several decades, and one which spans a vast spectrum of areas. These range from military and medical capabilities to humanitarian assistance, and disaster response.

“So, this is an ongoing relationship and I think that, specifically, tying any of these things to current events in Venezuela would be overstating the important [military cooperation] relationship that we’ve had since 1966 since the independence of Guyana,” the SOUTHCOM Commander posited.

Similar sentiments were expressed by GDF Chief-of-Staff, Brigadier Omar Khan, who pointed out that Guyana not only has military cooperation with the US but other Western nations as well as those within the Region.

Asked whether it is concerned that the GDF’s continued military engagements with various partners could be viewed by Venezuela as an act of aggression, Brigadier Khan contended that these collaborations were geared towards not only ensuring Guyana’s security but also collective regional security and stability of the Region.

“The Region is made up of many actors, several countries and no one country can say to themselves that they can do it on their own. We always need partnership, and partnership has been the foundation for collective security across this Region. We’ve not only had the US, we’ve had the UK (United Kingdom), we have the Netherlands, we have forces [in the Region like] French Guiana, and they have been doing their work as part of this collective security. Caricom (Caribbean Community) as you know has its own security component that we are a part of. The Regional Security System – Guyana became a full member [of the RSS] in 2022. And that is all part of this, what we call regional security. So, it’s not Guyana alone; it’s not the US alone. But I must say the US has been a major part of bringing all the actors together,” the Army Chief pointed out.

Back in December 2023, the UK sent a Royal Navy patrol vessel to Guyana’s waters as part of a series of engagements in this region – a move which was viewed by Venezuelan President Nicolás Maduro as a threat to the peace and sovereignty of his country by the UK. He also said the deployment of the British warship to Guyana’s waters violates the spirit of the December 14, 2023, Argyle Agreement between the two South American neighbours signed in St Vincent and the Grenadines and called for the vessel to be withdrawn.

However, President Dr Irfaan Ali declared that “Guyana has long been engaged in partnerships with regional and international States, aimed at enhancing internal security. These partnerships pose a threat to no one, and are in no way intended to be aggressive or constitute an offensive act against any State.”

Britain’s Defence Ministry had said the HMS Trent, a river-class patrol vessel, would take part in joint exercises with Guyana after Christmas.

However, in response to the deployment of the British naval ship, Maduro ordered “the activation of a joint defensive action of the Bolivarian National Armed Forces” off the coast of Guyana’s Essequibo region.

Those tensions were eventually calmed following the intervention of St Vincent and the Grenadines Prime Minister, Dr Ralph Gonsalves, in his role as interlocutor between the two nations following the recent Argyle Declaration.

Amid the height of the tensions late last year, ExxonMobil’s Chief Executive Officer (CEO) Darren Woods told CNBC that the oil major’s operations in Guyana will continue as normal, noting that “from our perspective, we know what we need to do in the country, develop those resources economically, environmentally responsibly, and do what we’ve been contracted to do, that’s what our organisation is focused on.”

He added, “I’m not sure Guyana is standing on its own…you’ve all seen what happens when nations’ sovereignty is 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].”

Esso Exploration and Production Guyana Limited (EEPGL), Exxon’s local subsidiary, is the operator of the Stabroek Block, and holds a 45 per cent interest then, while Hess Guyana Exploration Ltd holds a 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 agreed to merge with Chevron, and this transaction is expected to be closed in the first half of this year.

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, and 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.