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Guyana’s oil development will go down as one of the most successful in the history of oil and gas – Darren Woods tells Yahoo News
Chief Executive Officer of Exxon Mobil Corporation, Darren Woods
Kaieteur News – The battle of oil giants currently unfolding is one that will determine who goes down in the history books as a participant in the one of the industry’s most successful deepwater developments.
Pointing to the significance of the country’s success in the industry was Chief Executive Officer (CEO) of Exxon Mobil Corporation, Darren Woods on Tuesday.
Woods during an interview with Yahoo Finance, released yesterday, was asked about the outcome of the arbitration process it filed for, in relation to Chevron Corporation’s acquisition of American oil major, Hess Corporation.
To this end, he explained, “The Guyana development will go down as one of the most successful deepwater developments in the history of the industry and the success of that development is in large part driven by all the work that we have been doing to grow that value, to develop that resource effectively and expeditiously.”
ExxonMobil announced the discovery of oil in 2015 and swiftly moved to commence production activities by 2019. The company had received an award last year for the rapid pace its affiliate; ExxonMobil Guyana Limited was able to develop the country’s first oil project, Liza One. The success did not end there however, as more than 11 billion barrels of oil have since been discovered in the Stabroek Block. The rapid discoveries have transformed Guyana to the world’s fastest growing economy, boasting the world’s largest discoveries in a decade.
ExxonMobil is the operator of the Stabroek Block with a 45% interest, while Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Petroleum Guyana Limited holds 25% interest.
Hess Corporation has agreed to sell all of the company’s shares to Chevron Corporation, through a US$53B transaction. This deal affects Hess’ global assets, including its share in the Stabroek Block.
ExxonMobil filed for arbitration since the oil giant believes it has preemptive rights, which allow shareholders access to stock before it is offered to others.
Woods reiterated in the Yahoo Finance interview, “The contract that we signed with those partners give us a right that if any one partner chooses to leave the venture (or) there’s a change in control that the existing partners have the right to preempt and have an option to participate in that change. We’re trying to preserve that, that we maintain and confirm our preemption rights, the right of first refusal on the deal, that’s kind of objective number one.”
He added, “As part of that process then in sustaining that right or confirming that right is to understand what is, take the Chevron- Hess transaction, what is the value of the Guyana assets within that transaction, so that gives us an understanding of the value for the asset and then the third step would be for us as a company to understand the value of that preemption right and what’s in the best interest of the corporation and for our shareholders and so those are the three objectives that we have.”
Despite the rumble between oil companies to cash in on the vast resources discovered in Guyana’s Stabroek Block, the government has refused to engage the Contractor for a better deal. The government argues that seeking better terms can chase investors away from the Guyana basin and stagnate the country’s growth potential, in the rapidly developing sector.
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