The world’s newest offshore oil player, Guyana, is considering making a big move—one that could sideline Exxon from bidding on further exploration areas, Vice President Bharrat Jagdeo said at the BNEF Summit in New York on Tuesday.
The news comes as Vice President Bharrat Jagdeo said that the nation’s oil wealth poses a risk, and that diversifying the fastest growing economy in the world would be critical.
It also follows Exxon’s FID for an additional $10 billion on its Yellow Tail project, which should start producing in 2025 with a production of 250,000 bpd—Exxon’s largest Guyanese project to date.
Guyana is now planning the next round of oil licensing, with decisions on the licensing process expected by September, but Guyana has had concerns about the number of oil projects Exxon now controls.
Hess and CNOOC, who also hold large positions in Guyana’s oil resources, could also be excluded.
Guyana has been inundated with oil company interest after Exxon made its initial discovery since 2015, and Guyana will now look for a “strategic partner” to run a state-run oil company—potentially from the Middle East.
The push for Guyana to have a bigger hand in its oil wealth is nothing new. Guyana was criticized for the deal it made with Exxon following Exxon’s initial discovery on the grounds that Guyana gave up too much to Exxon. One report from Watchdog Global Witness in 2020 suggested that Guyana lost as much as $55 billion from its offshore oil deal with Exxon.
Exxon has made more than 20 discoveries in Guyana, and the oil supermajor is prioritizing its exploration and production in Guyana due to low breakevens and high-quality, light, sweet oil found there.
Guyana’s oil production is expected to rise to 800,000 bpd by 2025, Jagdeo said.
By Julianne Geiger for Oilprice.com
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