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The vital importance of Guyana’s oil to Exxon

Jun 05, 2022 Editorial

Kaieteur News – If there were any doubts before about the significance of Guyana’s oil to Exxon, those can now be discarded. The CEO of the American oil giant said so himself (“Guyana’s oil critical for Exxon’s increased global production -Darren Woods”) -KN May 31). Since that pivotal role of Guyana’s oil is now a widely known fact, CEO Woods is on solid grounds in saying what he said. But when he said so publicly, it reveals the feebleness of Guyanese leaders in their continuing failures to capitalise on this natural resource endowment.
To use Mr. Woods’ own words, Guyana’s crucial contributions rings like the stuff of corporate dreams” “In Guyana, the company has two oil fields in production and two more in development, and made new discoveries that increased the estimated recoverable resource to nearly 11 billion barrels of oil equivalent.” In the language of the ordinary man, Guyana has an ocean of oil beneath its seabed. The exploration has just begun, and the Stabroek Block alone involves approximately 10,350 sq miles. It is an incredible amount of space that Exxon has been given to explore for oil, and several times bigger than Trinidad and Jamaica combined, with not even Haiti as big. However viewed, it is reasonable, even safe, to think that the oil discoveries of Exxon in Guyana’s offshore waters are only just beginning. “Two oil fields in production” and “two more in development” as excitedly gushed by CEO Woods could represent the tip of our undersea oil iceberg. Whatever description we come up with, be it iceberg, mountain, ocean, for the underwater oil possibilities, they all fit. Thus, it makes complete sense for Mr. Woods to speak so glowingly of Exxon’s great Guyana oil boon before his company’s investors.
Oil “reserves” have great significance in how the stock markets value oil companies. Guyana’s 11 billion barrels have hit the sweet spot or Exxon, and given that more as yet undiscovered billions are probable, the company is sitting on a mountain of a gold mine in this country. All things considered, it may not be too much of a stretch to say a mountain range of oil possibilities exists in Guyana, which sets up Exxon nicely for years to come. Even further, the quality of Guyana’s oil is premium grade, as in light and sweet. To top it all off, it is cheap for Exxon, so unimaginably dirt cheap that it is almost free. There is a little fly in the oil ointment, though, and it is a pest, a real nuisance creature that buzzes and torments.
The problem is that Guyana is getting too little for its oil, and more and more Guyanese are coming to this understanding. The sentiment is that Exxon has robbed them, and Guyanese leaders are in cahoots with the company. Many have high hopes of this oil, and they are banking their future well-being on what Guyana gets from its wealth, and what that should mean for the ordinary citizen. It is a spreading belief among Guyanese that current leaders are failing to rachet up their energies, not applying sufficient pressure, on Exxon. Frustration and fury are intensifying, and this does not harbour well for the peace and stability of society. To compound matters, one half of Guyana sees Government’s sharing of the national patrimony with the other half, while there is nothing equivalent coming their way.
A growing mindset among Guyanese is that since this quality oil means so much to Exxon’s profitability and its shareholders, then our political leaders must find ways to use it to extract more from the American oil monster. We have the commodity in huge quantities presently with more likely to be found, hence we are in the driver’s seat and should call the shots. Exxon needs it, craves Guyana’s oil, therefore, we must wield it like a weapon and make the stubborn (and cheapskate) oil company come to a fairer place. It must pay more for our oil, it must be made to feel the heat, it must be seen as a greedy enemy, and not as a partner anymore. Exxon’s executives and shareholders are rejoicing, while Guyanese are grieving. This must not be allowed to continue.

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