Oil reserves – what is ExxonMobil withholding?

Jan 12, 2025 Editorial, News

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Editorial…

 Kaieteur News- John Hess, CEO of Hess Corporation, and 30% partner in the ExxonMobil-led Guyana oil consortium, is restless.  It is the first time that we can remember, where the partners have had a word of difference publicly.  It seems that the issue is over the true level of estimates of proven oil reserves in the Stabroek Block.  According to Hess, his company’s estimates are higher than that of ExxonMobil.  We don’t know if more on this is going to circulate in the media, but it returns the reserve issue into the public limelight.

Guyanese, as owners of this huge offshore oil patrimony, are starved for information on most components of their natural resource business.  Many doubt that they are being provided with the most accurate information on proven reserves.  Due to a lack of transparency from their government, and a national leadership group that lives on secrecy, there is scepticism about the 11.6B barrel figure given to them.  And now that Hess has had his say, the total proven reserves issue has just gained new life.

This reserves issue has got every interested party in the Stabroek Block coming up with their own number.  The Government of Guyana has a figure of 11.6B barrels, which prompted ExxonMobil Guyana President, Alistair Routledge to note that his company’s estimate is lower.  He is not taking any chances by saying how much lower.  Apparently, Routledge has gotten very cautious with whatever he shares.  He has no way of knowing how the independent media in Guyana would receive whatever ExxonMobil provides as its expert estimates of reserves.  But there was John Hess telling the world during a Goldman Sachs Research: Energy, Clean Tech and Utilities conference that his company’s reserve numbers are higher than those of ExxonMobil.  Whatever the two companies reserve numbers are, they are not parting with the specifics.

Several questions arise automatically.  How far apart are the two companies?  Is the Guyana proven oil reserve number of Hess bigger than that of government’s 11.6B barrels?  Since ExxonMobil’s reserve number is lower than that of Guyana, how much lower is it?  We note that during his participation in the Goldman Sachs conference, the Hess Corporation CEO said that ExxonMobil’s reserve number is “very conservative.”  This only intensifies interest as to why ExxonMobil is taking this approach, in effect lowballing the reserves in the rich Stabroek Block.  Further, it is reasonable to think that the third member of the ExxonMobil-led consortium, China National Offshore Oil Corporation (CNOOC) has its own number for the total proven reserves in the Stabroek Block.  In fact, CNOOC had to use its own computations to estimate the reserves in the Lancetfish discovery at approximately 746M new barrels of oil.  The Bluefin discovery, meanwhile, is estimated by CNOOC to have more than Lancetfish.  So, right away that is over one and a half billion barrels of new oil reserves, at a minimum, from only two of the last eight discoveries.

So, what is going on with these estimates of total oil reserves?  Specifically, what is ExxonMobil up to with its “very conservative” estimate, and its thunderous silence with how much oil there is with the eight new oil discoveries included?  ExxonMobil Guyana President, Routledge, who is not one ever lacking with an answer, spoke of different ‘methodologies and assumptions.’  We do not have any difficulty with that, but it seems too much of a head fake, the equivalent of one of the company’s slick verbal shifts that says something but answers nothing.  Have the eight new discoveries been appraised?  If not, why are they taking so long, notwithstanding his prior responses, which were exercises in distraction and denial.  How can CNOOC do so for two of them, while ExxonMobil maintains a tight hold on what the reserves are?  Because ExxonMobil has been a partner in the thick webs of secrecies weaved by the PPP/C Government (US billions in expenses, audit reports, studies), the company’s stock with Guyanese is not in a favourable place.

Methodologies, assumptions, and monetizing known oil assets, may appear persuasive to Routledge.  Not so at this paper, and with more Guyanese sceptical.  Guyanese were wishing for a genuine oil partner, but see themselves dealing with a manipulator.

(Oil reserves – what is ExxonMobil withholding?)

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• Editorial, ExxonMobil, Government of Guyana, Hess Corporation, oil reserves

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