June 25, 2024

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Chevron follows Exxon to Guyana’s oil riches

2 min read

Chevron’s deal to buy Hess last week for $53bn gives the US supermajor access to one of the hottest prospects in the global resources industry: Guyana’s 11bn barrels of offshore oil.

There was little interest in the Latin American country’s potential as a fossil fuel producer when ExxonMobil began exploring Guyana’s waters for oil in 2008. That changed in 2015 when an Exxon-led consortium, including Hess and Chinese giant Cnooc, made a significant discovery at the Liza field, in the 6.6mn acre Stabroek Block.

The consortium has made more than 30 significant discoveries since then, with the latest announced on Thursday. The steady stream of oil output should help sustain Exxon’s — and now Chevron’s — crude business for decades.

It should also transform one of Latin America’s poorest nations, home to just 800,000 people. Oil output has gone from zero to 390,000 barrels a day last year. The unusually fast ramp-up could push production to 1.2mn b/d by 2027 — equivalent to about a third of Exxon’s current daily production.

Last year Guyana’s economy grew by a record 62.3 per cent, the highest rate in the world, as the petrodollars poured in. The IMF expects it to expand by another 38 per cent in 2023.

Its rise comes as the world plots a move away from fossil fuels, climate campaigners object to the very principle of further oil and gas development, and opponents worry about oil companies’ chequered history of operating in poor countries.

Even so, the US oil majors’ investments look set to make Guyana one of the last petrostates to emerge in the oil era.

“It is a jewel in ExxonMobil’s crown. It’s a significant resource. It fits very well with the execution capability of ExxonMobil,” Alistair Routledge, Exxon’s Guyana president, told the Financial Times.  

“Clearly what’s attractive to Chevron is that ExxonMobil is operating at a very high level . . . From first discovery in 2015 to first oil in 2019. I mean, [it’s]…

2023-10-29 13:00:24

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