Guyana Gas Bonanza On Hold: Exxon Reportedly Faces Deadline For Stabroek Development

An oil consortium led by Exxon Mobil Corporation XOM reportedly needs to decide by October whether to develop a large natural gas find off the coast of Guyana.

The government has been pressing for a bonanza from mostly untapped gas reserves found by the Exxon-led group, reported Reuters.

Under its production agreement, the consortium, which includes Hess Corp HES and CNOOC Ltd., must return to the government by October about 20% of its massive Stabroek block if that area remains undeveloped.

Exxon stated that it expects to complete an appraisal of the gas findings by early next year and is considering how to best commercialize the natural gas, per the report. 

Guyana Vice President Bharrat Jagdeo stated that 20% of the undeveloped Stabroek area might include the group’s Haimara discovery, where it mostly found natural gas.

Jagdeo added, “We have had some discussions with Exxon and told them that if they are not going to work on it, they have to relinquish. They did some studies and said they might be able to move forward with the project.” 

Exxon has said the Haimara-1 well found approximately 207 feet (63 meters) of a high-quality, gas-condensate bearing sandstone reservoir.

As per the report, Exxon is in discussions with Guyana over what areas will be relinquished and has not concluded whether the gassy areas are among them. The consortium’s exploration agreement runs through 2027.

In February, Jagdeo said that Guyana wanted another international developer to participate in the development of the gas project. 

According to the report, Guyana is moving ahead to select a company to develop the project, which it estimates will require between $10 billion and $15 billion in investment.

In April, Exxon and Hess made a final investment decision for the Whiptail development offshore Guyana following receiving the required government and regulatory approvals. 

Related: Exxon Taps TechnipFMC For Subsea Gear In Guyana’s $12.7B Whiptail Project

Apart from this, as per Reuters, Norway’s $1.6 trillion sovereign wealth fund stated that they would vote against the reappointment of Exxon’s lead independent director, Joseph Hooley, due to the company’s lawsuit targeting climate activist investors.

Related: Exxon Wins Round One in Lawsuit Against Climate Activist Investor: Report

Investors can gain exposure to the XOM stock via Energy Select Sector SPDR Fund XLE and IShares U.S. Energy ETF IYE.

Price Action: XOM shares are up 0.13% to $113.66 at the last check Friday.

Photo: Del Henderson Jr. via Shutterstock