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ExxonMobil and Venezuela
(Kaieteur News) – The CEO of ExxonMobil, Darren Woods is bolder than a US Navy Seal. President Donald Trump did the heavy lifting on Venezuela, and all but handed US oil companies the hundreds of billions of barrels of oil on a platter, and it is not good enough. Venezuela poses too many legal and financial risks and is ‘un-investable’ without certain guarantees. The Texas-headquartered oil giant refuses to taking the bait that the US will provide all the protection needed. Darren Woods wasn’t budging, and he has now made himself a marked man in the eyes of President Trump.
The fact is ExxonMobil has lost billions in Venezuela when its assets were seized not once, but twice. One can appreciate the company’s resistance to getting burned a third time. One can appreciate further the posture of ExxonMobil’s Woods when he has Guyana’s oil in the palm of his hand. It is accurate to say that he has the same power and control over the Guyana Government. Guyana’s oil is of a high quality, and it is cheap, almost free. Guyanese were informed recently that the Liza 1 and Liza 2 oilfields will start to run dry in three years. We have said several times before, oil is a depleting asset, will not last forever. It is compulsory, therefore, that the best stewardship possible is part and parcel of this national wealth. Oil discoveries involving commercially viable quantities used to be announced in a regular stream. In the past few years, discoveries of such type, also have vanished.
The question is what do Guyanese know about their oil? How much oil is in the Stabroek Block? Where does the true level of oil reserves (number of barrels of oil equivalents) stand? And, how much oil is ExxonMobil really pumping daily? Can the official production figures be trusted, when oil activity is occurring almost 200 kilometers from shore? When ExxonMobil is the only entity that has the answers to these questions, why would any oil company head, and especially one as fast on his feet as Woods, plunge into the Venezuelan minefield because the president guaranteed protection?
ExxonMobil has the luxury of saying ‘hold on for a minute’, because it has a profitable portfolio of oil assets spread across different locations, with Guyana’s oil being the crown jewel in the company’s crown. Woods didn’t come right out and say so, but he is looking for comprehensive insurance coverage, in the event that developments in Venezuela head in the wrong direction. In other words, protection for the company’s investments (plant, property, and people) and it is ready to go full speed ahead to Lakes Orinoco and Maracaibo.
It is edifying how ExxonMobil’s chief went to great lengths to protect his own interests. Today, Guyanese should put aside partisanship and polarization and recall how much ExxonMobil first balked, then played games with full coverage protection for Guyana in the event of a massive oil spill where oil activity is happening at a fevered pace. Woods will not rush to invest in Venezuela’s huge chest of oil because he smells danger. When Guyanese felt the same way relative to an oil spill, ExxonMobil even got the PPPC Government to betray its own people, and side with the company in yet another sellout of this country’s most prized possession.
Woods has the cushion of Guyana’s sweet oil that is so cheap that it is almost free, so he can take his time and deliberate about Venezuela’s heavy oil due to risks feared. When Guyanese were concerned (and continue to be) about the risks of a catastrophic oil spill, ExxonMobil waved away their anxieties, and still had the gall to call itself a faithful partner. One that can be depended on because it is trusted, has done many things to earn that trust. The long and short of ExxonMobil’s position on Venezuela is that it wants more, it wants all guarantees about all that it can get, before it could think about moving.
When Guyanese ask for more from their own oil, having been victimized by a deal that reeks of lopsidedness, they get mocked and knocked down for an answer. Venezuela is a problem; Guyana is a walkover.
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