ExxonMobil says not afraid of Venezuela’s intimidation tactics

…awaiting feedback on oil blocks bid submitted

ExxonMobil, which is producing and exploring for oil offshore Guyana in waters Venezuela unjustly disputes ownership of, has made it clear that the Spanish speaking country’s intimidation tactics do not scare them.
During a press conference on Tuesday, Exxon Guyana President Alistair Routledge was asked about Venezuela’s intimidation tactics against Guyana. When Guyana went out to auction its available oil blocks in its Exclusive Economic Zone (EEZ), Venezuela had protested against this. And of recent, Guyana has had to inform the international and regional community of Venezuela military exercises close to the border.
According to Routledge, he is no stranger to Venezuela’s tactics, having worked in the country at one point. The oil executive made it clear that ExxonMobil remains committed to staying in Guyana.
“Some of you will know I did work in Venezuela many years ago. And so, I’ve had direct exposure to working with the government there. We have not been scared away by Venezuela. That’s why we continue to work in Guyana. That’s why we anticipate continuing to do so for decades to come.”
In fact, Routledge pointed out that Exxon submitted a bid during the recently concluded oil blocks bid round, another testament to the company’s commitment to Guyana. He explained that they are currently awaiting feedback on that bid.
“To your specific question on the licensing round and the bids, we did submit a bid under that process. We raised a number of questions on the terms that were in there. So, we’re yet to hear a response from the government on whether our bid is acceptable or not. That process, as you heard from the government, is still underway.”
Meanwhile, Routledge was asked to give Exxon’s perspective on the new fiscal regime surrounding the oil and gas sector, including the new model Production Sharing Agreement (PSA).
“The fiscals are one thing… and this is normal. In a country where the Stabroek block agreement, when it was signed, when nothing had been discovered… in 2016 the agreement was improved, but very little had been found. Still extremely high-risk frontier. When you then go to bid rounds later on, having had discoveries in the basin, the basin becomes more attractive.”
“It’s quite normal for the government to increase the fiscal take, for it to be more favorable to the country. Because now, there’s less risk. Already, the company has proven there’s hydrocarbon. So that’s a normal thing on the fiscal side,” the executive said.
In the same breath, however, Routledge noted that the fiscal terms are a tough sell for the company and may see them not signing them in their unchanged form. He noted that there are concerns including on relinquishment and the time periods.
Launched in December 2022, the auction of the 14 oil blocks offshore Guyana closed in September with bids received for eight of the blocks. The sizes of the 14 oil blocks on auction range from 1000 to 3000 square kilometres (sq.km). The government is presently reviewing these bids, with the possibility of awarding the blocks by this year end.
When Guyana concluded the bid round of its historic oil blocks auction, however, Venezuela had issued a communique in which it protested against this oil block auction, even though all the blocks are in Guyana’s sovereign territory.
In its communique, Venezuela said: “Guyana does not have sovereign rights over these maritime areas and consequently any action within their limits. It is a violation of International Law, as long as they are not carried out through an agreement with Venezuela.”
Venezuela further said that “any illicit and arbitrary concession that Guyana grants, has granted or intends to grant in the areas in question is unacceptable and violates its sovereign rights, and warns that these actions do not generate any type of rights to third parties who participate in said process.”
Since then, condemnation of Venezuela has flowed from the People’s Progressive Party/Civic (PPP/C) Government, the A Partnership for National Unity/Alliance For Change (APNU/AFC) opposition, Organization of American States (OAS) Secretary General Luis Almagro and US Assistant Secretary of State for Western Hemisphere Affairs, Brian A. Nichols.
Venezuela is laying claim to more than two-thirds of Guyana’s landmass in Essequibo. The Spanish-speaking country is also claiming a portion of Guyana’s EEZ in which more than eleven billion barrels of proven reserves are estimated to exist. (G3)