Venezuela tensions are set to ease, resulting in a rise in the oil production potential of Guyana
Geopolitical experts and oil specialists?said that the tiny oil-producing country of Guyana has an opportunity to expand its economy amid the ongoing U.S. activities in Venezuela. This is ahead of the Guyana Energy Conference. The 'growth potential' of Guyana was the focus at the four-day conference that began on Tuesday, in Georgetown. Executives and government officials met to discuss the efforts to train the local oil workforce, increase investment and build an downstream sector.
Irfaan Ali, the Guyanese president, announced on Tuesday that the country would use its oil and gas boom to drive other sectors of the economy. He said the government was seeking foreign investment to build two new airports and to create a digital payment platform.
The government has also invited expressions of interest for the construction of Amaila Falls, a 165 megawatt power plant.
Hydroelectric project
The oil promise of Guyana has been in the news for many years. However, the events in Venezuela have brought the region into the spotlight after U.S. forces removed Venezuelan president Nicolas Maduro last month. Donald Trump, the U.S. president, has called for $100 billion in investment to revive Venezuela's oil industry. This development could ease a long-standing dispute between the Guyanese Government and Exxon Mobil, which forced the Guyanese to stop exploration of about 30% the Stabroek Block.
Henry Ziemer is an associate fellow with the Center for Strategic and International Studies. He said that the chances of a political flare-up between the two nations, at least for the moment, are extremely low. "It removes foreign investment's biggest barrier."
He said: "If there is a country that will benefit the most from Maduro being removed, it would be Guyana." Exxon CEO Darren Woods stated last month that Maduro's capture and removal by the U.S. could lead to improved operating conditions in Guyana. The Stabroek block is operated by Exxon, Chevron, and China's CNOOC.
Woods stated that "perhaps we'll be able to see an opportunity in less naval patrols, which will make it a bit more friendly."
Potential for more exploration
The International Court of Justice of the United Nations is overseeing court proceedings over Guyana's and Venezuela's border disputes. A final decision may take many years but any detente would help lift the force majeure placed on part of the Stabroek Block in the disputed waters, and encourage new exploration. Last year, the consortium increased its oil production in Guyana from 900,000 to 1,15 million barrels per day. A new project that will be developed this coming year will increase production even further. Since Exxon found oil in Guyana in 2015, the country has grown to become a "key South American producer" of oil. This is despite Venezuela's stagnant oil industry. Exxon executives will be expected to provide updates on operations in Guyana, including an extensive gas plan for power generation. Mike Wirth, the CEO of Chevron, made his first official appearance on Tuesday at the conference. The U.S. oil company acquired a 30% stake in Stabroek Block after a long legal battle with Exxon.
Wirth stated that "we aim to be a trustworthy, collaborative and transparent partner who is focused on creating wealth and value." The company believes that the oil and gas resources in Guyana are more than 11 billion barrels equivalent to oil, and is eager to assist with further exploration.
Woods, Exxon's Woods, was asked about Chevron’s comments from a November interview. He replied that the company had a fiduciary duty to update its resource estimation when it has new information. We don't yet have any updates to the resource estimate, despite all of our work.
(source: Reuters)
