GEORGETOWN, Guyana, CMC – The Guyana government has welcomed the decision by the US-based oil and gas company Chevron to buy Hess for US$53 billion in stock, saying its presence along with another US oil giant, ExxonMobil, will enable the government to achieve its accelerated development plan.
The announcement by Chevron on Monday is the second proposed mega-merger among the most prominent US oil players after Exxon Mobil bid $60 billion for Pioneer Natural Resources earlier this month.
The proposed deal raises the competition between Chevron, the second major US oil and gas producer behind Exxon, putting it in direct competition with its bigger rival to develop drilling in Guyana.
The acquisition offers a solid strategic fit for the company, granting the company 30 percent ownership in the Stabroek Block, representing more than 11 billion barrels of oil equivalent.
“We are pleased that there are two major oil companies here. Recently, I have seen a lot of public reports globally. Here locally about the recent takeover of Hess International by Chevron…the fact that Guyana is mentioned in almost every one of those international news reports demonstrates how far we have come and the importance of our growing importance of our country in the global market supply for crude oil,” Jagdeo said.
He told reporters that Guyana is becoming an attractive destination for investments, with ExxonMobil already operating in the country and Chevron now looking to enter the country’s lucrative market.
“You have seen globally now a move by Exxon and Chevron, two of the biggest companies in the United States of America, moving to consolidate and also to grow their crude assets, and they are doing so and investing more substantial sums of money in acquiring new assets because they are calculating that the global demand for fossil fuel will stay with us for a long time in the future,” Jagdeo said.
ExxonMobil initiated oil and gas exploration activities in Guyana 2008, collecting and evaluating substantial 3D seismic data that led to the company safely drilling its first exploration well, Liza-1, in 2015. Fast forward to 2023, production is ongoing, and more projects are expected to stream in the lucrative Stabroek Block.
The Stabroek Block is 6.6 million acres (26,800 square kilometers). ExxonMobil affiliate Esso Exploration and Production Guyana Limited is the operator and holds 45 percent interest. Hess Guyana Exploration Ltd. has a 30 percent interest, and CNOOC Petroleum Guyana Limited holds a 25 percent interest.
Jagdeo said Guyana’s existing US$750 million carbon credits deal with Hess will remain intact even with the sale of the company to Chevron.
Guyana’s first and only carbon credit deal so far, brokered after the country got notable carbon credits issued last December, was executed with Hess Corporation, one of the companies searching for and producing petroleum in the country’s nascent oil and gas sector.
A carbon credit is generally a tradable permit or certificate representing removing a certain amount of carbon dioxide from the environment. Since carbon dioxide is the principal greenhouse gas that harms the environment, it is tracked and traded like any other commodity.
By the end of 2030, Guyana should amass at least US$750 million from the deal inked with Hess. Of that sum, Indigenous communities, altogether, should receive at least US$112 million—that is, their 15 percent direct cut as stipulated by Guyana’s Low Carbon Development Strategy (LCDS).
and then