Released November 02, 2023 | SUGAR LAND
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Researched by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Guyana and Venezuela continue to bicker over territorial disputes as the former's prospects grow. The governments have been openly exchanging statements and threats as hydrocarbon discoveries have been announced in Essequibo, a swath that covers two-thirds of Guyana and many of the offshore areas where energy companies invest and operate. The area is claimed by both countries, although it is entirely within Guyana's borders.
Guyanese Vice President Bharrat Jagdeo said last week in a press conference that his country has awarded eight exploration and drilling contracts to companies such as ExxonMobil Corporation (NYSE:XOM) (Spring, Texas), Shell plc (NYSE:SHEL) (London, England) and QatarEnergy (Doha, Qatar). Two local Guyanese enterprises secured two of the other blocks.
In recent weeks, Venezuela has launched a major campaign, including a referendum, to raise its claim of the Essequibo. This has triggered a response from Guyanese President Irfaan Ali: "This Essequibo is ours, every square inch of it."
Up until now, companies exploring Guyanese waters have discovered about 11 billion barrels of oil in the Stabroek block, with ExxonMobil, the operator, announcing more than 30 oil discoveries. As a result, Guyana projects its oil production of about 400,000 barrels per day (BBL/d) could expand to as much as 1.2 million BBL/d by 2027.
The latest round of contracts awarded are for shallow and deepwater blocks located offshore Guyana, in the territorial waters disputed by Venezuela. According to Jagdeo, Guyana still needs to finalize its contracts with the companies, though his announcement has only agitated Venezuelan officials.
Additionally, the news of Chevron Corporation's (NYSE:CVX) (San Ramon, California) acquisition of Hess Corporation (NYSE:HES) (New York, New York), part of ExxonMobil's consortium in Stabroek block, indicates that majors are keeping their eyes on investments across the oil state.
Earlier this week, Venezuelan President Nicolas Maduro warned companies investing in Guyana that their projects could be at risk: "To all companies that intend to enter Venezuelan waters or undelimited waters, illegally, Venezuela will give them a response to comply with International Law. Venezuela does not recognize any license from Guyana!"
However, the threats have done little to deter major energy companies from investing in Guyana, despite previous incidents, such as the Venezuelan Navy's interception of a seismic exploration vessel in 2018.
To gather national support behind its Essequibo claim, Venezuela has scheduled a referendum on the matter for December 3. It is unlikely that the referendum will lead to any major action against Guyana, but it would reinforce Venezuelans' support for the territorial claim.
Despite the strong rhetoric and the referendum, Venezuela likely will continue to mediate the conflict through normal channels, while energy companies are expected to keep investing in Guyana's prospects.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Guyanese Vice President Bharrat Jagdeo said last week in a press conference that his country has awarded eight exploration and drilling contracts to companies such as ExxonMobil Corporation (NYSE:XOM) (Spring, Texas), Shell plc (NYSE:SHEL) (London, England) and QatarEnergy (Doha, Qatar). Two local Guyanese enterprises secured two of the other blocks.
In recent weeks, Venezuela has launched a major campaign, including a referendum, to raise its claim of the Essequibo. This has triggered a response from Guyanese President Irfaan Ali: "This Essequibo is ours, every square inch of it."
Up until now, companies exploring Guyanese waters have discovered about 11 billion barrels of oil in the Stabroek block, with ExxonMobil, the operator, announcing more than 30 oil discoveries. As a result, Guyana projects its oil production of about 400,000 barrels per day (BBL/d) could expand to as much as 1.2 million BBL/d by 2027.
The latest round of contracts awarded are for shallow and deepwater blocks located offshore Guyana, in the territorial waters disputed by Venezuela. According to Jagdeo, Guyana still needs to finalize its contracts with the companies, though his announcement has only agitated Venezuelan officials.
Additionally, the news of Chevron Corporation's (NYSE:CVX) (San Ramon, California) acquisition of Hess Corporation (NYSE:HES) (New York, New York), part of ExxonMobil's consortium in Stabroek block, indicates that majors are keeping their eyes on investments across the oil state.
Earlier this week, Venezuelan President Nicolas Maduro warned companies investing in Guyana that their projects could be at risk: "To all companies that intend to enter Venezuelan waters or undelimited waters, illegally, Venezuela will give them a response to comply with International Law. Venezuela does not recognize any license from Guyana!"
However, the threats have done little to deter major energy companies from investing in Guyana, despite previous incidents, such as the Venezuelan Navy's interception of a seismic exploration vessel in 2018.
To gather national support behind its Essequibo claim, Venezuela has scheduled a referendum on the matter for December 3. It is unlikely that the referendum will lead to any major action against Guyana, but it would reinforce Venezuelans' support for the territorial claim.
Despite the strong rhetoric and the referendum, Venezuela likely will continue to mediate the conflict through normal channels, while energy companies are expected to keep investing in Guyana's prospects.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
