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Exxon Plans to Tap Into Guyana's Natural Gas by 2030 and tensions with Venezuela
02/26/2024
- Exxon Mobil aims to lead Guyana's inaugural offshore gas project
- The company explores innovative methods to bring Guyana's gas to the global market
- 16 trillion cubic feet of gas resources amid a shift to cleaner energy
- Exxon will drill five wells near Suriname in the Stabroek Block this year
An Exxon Mobil-led group is looking into launching Guyana's first offshore natural gas project near its sea border with Suriname, according to an executive from the U.S. oil major.
The team of Exxon, Hess Corp, and CNOOC is being pushed by Guyana's government to tap into the country's large, unused natural gas reserves. This push comes alongside the discovery of over 11 billion barrels of oil and gas since 2015. Guyana has plans to increase its oil production to 1.2 million barrels a day by 2027, but it's also looking to make the most of its gas resources. Vice President Bharrat Jagdeo has stressed the need to develop Guyana's estimated 16 trillion cubic feet of gas reserves quickly, as the world moves towards cleaner energy.
Alistair Routledge, Exxon's manager in Guyana, said the company plans to finish exploring and assessing the gas reserves by early 2025. He expects that gas production near Suriname might start by 2029 or 2030. It's still undecided if the consortium's seventh offshore project in Guyana will focus on oil or gas.
Exxon is set to drill five wells in the southeast area of the Stabroek Block, near Suriname, to assess the large gas reserves there, Routledge explained. The company is also exploring different ways to produce and ship this gas to customers around the world.
Vice President Jagdeo is calling for a collaborative effort to get the natural gas project off the ground, suggesting that bringing in another international company could help speed things up. Exxon is looking at several options for handling the gas, like a floating LNG facility, a processing plant on land, or a platform, depending on how much gas they find.
Trinidad and Tobago have offered to help develop Guyana's gas using their underutilized LNG export facility. However, Routledge believes this may not be the best economic choice.
Tensions with Venezuela
There have been previous incidents where Venezuelan forces expelled ExxonMobil teams from this disputed area, including a 2013 incident involving a Venezuelan gunboat and a 2019 incident with a military helicopter.
Despite a growing territorial conflict with Venezuela (which also lays claim to this oil-rich area), ExxonMobil plans to continue increasing its oil production in the waters off Guyana.
Recently, relations have hit a new low after Venezuelan President Nicolás Maduro hinted at forcefully claiming the Essequibo region. This has led South American leaders to seek ways to ease tensions and prevent any attempt by Maduro to annex this resource-rich rainforest. Yet, ExxonMobil's recent announcement might reignite the conflict.
The company remains committed to searching for oil in a region at the heart of a bitter dispute between Guyana and Venezuela, despite the risk of exacerbating tensions between these South American countries.
The head of ExxonMobil in Guyana, Alistair Routledge, made it clear that the company will go ahead with drilling two new wells off the coast of Guyana, stating firmly, "We are not going anywhere."
Guyana's stance, as voiced by Foreign Secretary Robert Persaud, is that Venezuela has no stake in this project since it occurs in areas internationally recognized as Guyana's territory.
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Chevron Faces Potential Hurdle from Exxon in $53 Billion Hess Acquisition
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This week, Chevron told its investors about a bump in the road with its plan to buy into a big oil project near Guyana. The problem is Exxon Mobil and China's CNOOC say they should get the first chance to make an offer against Chevron's plan to buy Hess's part in the project. This issue could mess up Chevron's plans, making it hard or impossible to finish the deal as they hoped.
Chevron Acquires Hess in $53 Billion Oil Megadeal Following Exxon's Pioneer Purchase
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Chevron Corp has agreed to acquire Hess Corp in a $53 billion all-stock deal. This acquisition will not only enhance Chevron’s position in the domestic oil market but also fetch a substantial stake in Exxon Mobil's promising Guyana projects.
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