Chevron Corporation’s imminent take over of Hess Corporation which holds a strategic 30 percent interest in the Stabroek Block underscores Guyana’s growing prominence in the global oil sector, says Vice President Dr. Bharrat Jagdeo. During a press conference on Thursday, the chief policy maker for the sector said he welcomes Chevron Corporation’s recent acquisition, adding that its financial might will expedite the country’s journey to peak production.
ExxonMobil, the current operator of the Stabroek concession, has ambitious plans to achieve an impressive 1.2 million barrels of oil by 2027.
The Chevron-Hess merger, set to finalize in early 2024, has placed Guyana in the international spotlight, with many media outlets deeming it the “crown-jewel” of the oil industry. Jagdeo asserted that these reports reflect Guyana’s escalating value to major industry stakeholders seeking lucrative returns.
Highlighting Guyana’s allure for investors, Vice President Jagdeo remarked, “The fact that Guyana is an attractive destination for investments is something we should all be happy about. You have seen globally, a move now by both Exxon and Chevron, the two biggest companies in the USA, to consolidate and acquire new assets because they are calculating that the global demand for fossil fuels will stay with us for a long time in the future,”
While global momentum is steadily shifting towards renewable energy, Jagdeo pointed out that transforming such resources into power remains a more costly endeavor compared to fossil fuels—a stance endorsed by the International Energy Agency (IEA).
Addressing skeptics of the oil sector’s future, Jagdeo stressed, “The IEA’s finding is that although we are moving at a fast pace to introduce renewables, the demand (for energy) is so robust now that demand for fossil fuel will remain high because the renewables cannot be introduced at the scale and pace to meet the demands… People who talk about the end of oil and (Guyana possibly being left with stranded oil assets) should look at this,” the Vice President said.
For Chevron, the high return, low-cost barrels within the Stabroek Block were too alluring to resist, particularly with Exxon already discovering 11 billion barrels of oil equivalent resources in the deepwater concession.
Expressing his confidence in Chevron’s expertise, Jagdeo expressed enthusiasm about the company joining Exxon in operating the Stabroek Block. The entry of these two industry giants is expected to provide the necessary financial firepower to catalyze peak production.
John Hess, CEO and Chairman of Hess Corporation, mirrored Jagdeo’s optimism. He assured shareholders on Monday that the Guyana Government supports the Chevron-Hess merger, predicting it will boost foreign investment confidence in Guyana.
Chevron’s purchase of Hess Corporation, worth a whopping US$53 billion, comes as the company champions the Stabroek Block as a gem of an asset expected to drive production growth for years to come. Chevron’s shareholders have been told to brace for a proposed 8% dividend per share hike, pending board approval.
The vast 6.6 million-acre Stabroek Block is operated by ExxonMobil, boasting a 45% working interest, while China National Offshore Oil Corporation (CNOOC) holds 25%. The Stabroek Block’s rapid development trajectory has earmarked it as a paramount player in the global oil landscape.
