ExxonMobil oil find may be 12 times Guyana’s GDP

ExxonMobil oil find may be 12 times Guyana’s GDP

President David Granger during his visit to the ExxonMobil's rig.

President David Granger during his visit to the ExxonMobil’s rig.

July 21, 2015 4:45 pm [Bloomberg.com] – An Exxon Mobil Corp. discovery off the coast of Guyana may hold oil and natural gas worth 12 times the South American nation’s entire economic output.

The Liza-1 well, which probably holds the equivalent of more than 700 million barrels of oil, may begin pumping crude in as few as five years, Raphael Trotman, Guyana’s minister of governance, said in an interview Monday 20 July 2015.

The prospect would be on par with a recent Exxon find at the Hadrian formation in the Gulf of Mexico, and would be worth about $40 billion at today’s international crude price.

Guyana produces no oil and its gross domestic product of $3.23 billion in 2014 ranked between Burundi and Swaziland, according to the World Bank. Exxon, which as a market value of $341 billion, has declined to provide an estimate for Liza-1 since describing the discovery as “significant” in a May 20 statement.

“A find of this magnitude for a country like ours, which sits on the lower end of the scale of countries in this hemisphere, this could be transformational,” Trotman said. “From my sense, from speaking to experts outside of Exxon, it has to be something excess of 700 million barrels.”

Exxon, which began drilling the well in March, said it found a 295-foot (90-meter) column of oil- and gas-soaked rock in a subsea region known as Stabroek Block. The well is 120 miles (193 kilometers) offshore and 5,710 feet beneath the sea surface.

The discovery may foretell a revival for the Irving, Texas-based company, which has been stung by three consecutive years of declining production and slowing reserves growth. Exxon’s exploration failure rate worsened to 39 percent last year from 33 percent in 2013, according to a February filing with the U.S. Securities and Exchange Commission.

“We’re encouraged by the results of this first drilling exercise,” Exxon spokeswoman Lauren Kerr said in a telephone interview. “We are continuing to evaluate the additional potential of the block.”

Kerr declined to comment on Trotman’s 700 million-barrel estimate.

Exxon is expected to post its lowest profit since 2009 for the second quarter when it announces financial results on July 31, according to the average of 11 analysts’ estimates compiled by Bloomberg.

The Guyana discovery would be on par with the combined size of a cluster of three reservoirs Exxon found in the Gulf of Mexico between 2009 and 2011.

 

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  • Clyde Duncan  On July 23, 2015 at 4:33 pm

    Caracas Chronicles [a week ago] – by Juan Cristobal Nagel:

    – A DISASTER IN BRAZIL?

    If you scan the vanilla-red webpages of Venezuela’s “hegemonized” media, you might learn that Nicolás Maduro went to a Mercosur summit in Brasilia today.

    Speeches were given, documents signed, and nothing major came out of it.

    Good thing we have the foreign media to give us the scoop. Apparently, Maduro, in a hissy fit, skipped the luncheon. Take it from, Jornal O Globo [my translation from the original Portuguese]:

    Irritated with the treatment [Brazilian] President Dilma Rousseff gave her Guyanese colleague, David Granger, the President of Venezuela left the Heads of State Summit of Mercosur early. The Venezuelan delegation left before the luncheon given by the hostess this Friday, after statements by Granger regarding what he calls ‘provocations’ from Caracas, who is disputing a border area known as the Essequibo.

    It all began when Dilma met with Granger in a bilateral meeting, moments before the summit began. Maduro had arrived earlier and tried to participate in the talks.
    The Brazilian President, however, did not authorize his entry into the meeting.

    During the meeting between Dilma and Granger, the President of Guyana asked for Brazil’s support in mediating a peaceful solution. Dilma accepted. Later, while the Venezuelan avoided mentioning the subject in his summit speech, Granger, who spoke after the Venezuelan, cited the conflict.

    “The entire world recognizes our borders. Guyana was obstructed while trying to develop its own territory. Our neighbours expelled one of our oil exploration ships, and our economy has been paralyzed. We have suffered tiresome provocations for many years,” said the Guyanese President.

    The Essequibo is a maritime zone where American company Exxon Mobil has discovered important oil reserves. The expectation is that Maduro, who will later take part in the summit of heads of state of Mercosur, will speak of the topic with Dilma.”

    Apparently, after the luncheon disaster Maduro said that he was perfectly fine with the rest of South America dipping their spoons into the Essequibo conflict.

    But is this a case of putting on a brave face in order to save it?

    After all, this is the first time that anyone other than the parties involved and the United Nations got directly involved in the conflict. And it doesn’t seem like this is happening because Venezuela wants it, but because Guyana insisted on it.

    In other words, Venezuela is being dragged into arguing about a bilateral border dispute … with a bunch of countries that have no stake in the matter. Maduro may try to spin this any way he wants, but this is not the outcome that Venezuela wanted.

  • Clyde Duncan  On July 23, 2015 at 4:51 pm

    by Gustavo Hernandez Acevedo – Mister Granger Goes To Washington Accompanied by GDF Brigadier – Caracas Chronicles instructs:

    July 23, 2015 After last week’s events in Brasilia, Guyanese President David Granger is now headed to the U.S. capital to participate in a regional security conference and to meet with State Department officials, in order to discuss the current Essequibo rift with Venezuela.

    Significantly, Granger is traveling along with the Chief of Staff of the Guyana Defense Force, Brigadier Mark Phillips. The meeting with the State Department is expected to focus on defense issues as well.

    Meanwhile, don’t expect a meeting between Granger and Barack Obama, as he’s about to make a trip to Kenya and Ethiopia at the same time.

    Granger has reasons to feel bullish, as the results of the oil exploration that reignited tensions between the two neighbouring countries are better than expected:

    An Exxon Mobil Corp. discovery in the Atlantic Ocean off Guyana may hold oil and natural gas riches 12 times more valuable than the nation’s entire economic output.

    The Liza-1 well, which probably holds the equivalent of more than 700 million barrels of oil, may begin producing crude by the end of the decade, Raphael Trotman, the South American country’s Minister of Governance, said in an interview Monday.

    “A find of this magnitude for a country like ours, which sits on the lower end of the scale of countries in this hemisphere, this could be transformational,” Trotman said. “From my sense, from speaking to experts outside of Exxon, it has to be something in excess of 700 million barrels.”

    As the drilling ship Deepwater Champion has left Essequibo waters, the oil and gas reserves found in the Stabroek Block could not only improve the Guyanese economy, but make the Cooperative Republic a regional energy player.

    Meanwhile, questions arise over UNASUR’s future involvement in the Essequibo matter, but actually this option is one of the alternatives given by the 1966 Geneva Agreement, once a bilateral solution is not found between both countries and included in Article 33 of the U.N. Charter. And that’s something that the central government is asking to enforce.

  • Clyde Duncan  On July 24, 2015 at 4:41 am

    CHALLENGES TO THE TERRITORIAL INTEGRITY OF GUYANA:
    – A LEGAL ANALYSIS by Thomas W. Donovan*

    digitalcommons.law.uga.edu/cgi/viewcontent.cgi?article=1208&context=gjicl

  • Clyde Duncan  On July 24, 2015 at 4:43 am

    CHALLENGES TO THE TERRITORIAL INTEGRITY OF GUYANA:
    – A LEGAL ANALYSIS by Thomas W. Donovan*

    http://digitalcommons.law.uga.edu/cgi/viewcontent.cgi?article=1208&context=gjicl

  • Clyde Duncan  On July 24, 2015 at 5:00 am

    The Venezuelan Navy is significantly expanding its amphibious transport capabilities and is now expected to receive two more Damen Stan Lander 5612 roll-on/roll-off landing vessels in August, according to local reports.

    These two vessels were launched from the Damen Song Cam shipyard in Vietnam in mid-July and are part of a follow-on order for eight, valued at EUR-94 million [USD-102.1 million] and signed in February 2014. Damen’s Song Cam shipyards will build another two landing vessels and it is expected that DAMEX – a joint Cuban-Dutch shipyard in Santiago, Cuba – will build the remaining four on order.

    Those vessels will join four of the same class delivered between April 2012 and December 2014 by DAMEX.

    Something weird is going on with Venezuela.

    They’re still increasing the size and capability of their military while they’re in the midst of an economic meltdown? Why?

    Regardless, they’re arming up to fight someone….I just don’t know who?

    http://www.damex.com/en/news/deliveries/2013/10/sla-5612-ab-los-roques

  • Gigi  On July 24, 2015 at 9:42 am

    So what good will Exxon oil find do for Guyanese. Nigeria is rich in oil yet over 60% of the population lives in poverty. Shell is the oil company operating in that country. Iraq is rich in oil and what good is it doing them now? So Guyana become an Iraq with this oil find. As we can see, ethnic cleansing is already taking place in Guyana under the Granger govt to the rejoicing of the other side. Along with this we can also see that Iraq, like Guyana, does not have an independent govt.

    I remember reading John Steinbeck’s ‘The Pearl’ in high school and it was one of my favourites. I have subsequently read all of Steinbeck’s books because his writings is so torturous and revealing, deeply exposing the ugliness of human greed and its relationship to violence and suffering. Guyana’s oil find is Kino’s pearl in Steinbeck’s ‘The Pearl.’ Essequibo rightfully belongs to Venezuela and Guyana’s pearl is better off in their hands…

  • Gigi  On July 24, 2015 at 10:41 am

    Mentioning Steinbeck’s novel brought to memory my own pearl story. When my kids were in elementary school, we lived in a coastal town in Florida and spend many days on the beach. Some days we would even have sunset picnic-style dinners on the beach. One day, my kids found a huge clam and they were immediately excited thinking that it MUST contain a big pearl. We took the clam home in a bucket of seawater but before they were allowed to open it, I told them they had to read Steinbeck’s novella ‘The Pearl.’ They decided to read the book together rather than independently because they would finish quicker. Upon finishing it, we discussed the story and I then asked what they thought of the story to which one of my kids piped up “fortunately for us we have ebay so no one has to know who we are!”

    Well, I had left the bucket with the clam on the back porch and when we went to uncover our find, all we found was a tipped over bucket and the split shell of the clam. I guess one of our four legged neighbours – of which we had many – had discovered a scrumptious find. We searched to see if, per chance, our pearl was left behind but alsas, twas not the case. We laughed and lamented that it was not meant to be. But we still have the shell and our beloved Steinbeck books. Moral of the story…it’s up to one’s own interpretation…

  • Ron. Persaud  On July 24, 2015 at 11:20 am

    So, Guyanese (leaders) have learned no lesson from the past?
    Bauxite ore in British Guiana was considered to be of the highest quality outside of Canada itself. Yet British Guianese used to pay more for aluminum pots and pans than Canadians did.
    DEM -ba became AWEE -ba and as far as I hear the industry has almost ceased to exist.
    There are many lessons to be learned from that sequence of events.

  • Clyde Duncan  On July 24, 2015 at 11:43 am

    Ron Persaud: There is no bauxite to be found in Canada …. The major locations of deposits are found in a wide belt around the equator. Bauxite is currently being extracted in Australia (in excess of 40 million tonnes per year), Central and South America (Jamaica, Brazil, Surinam, Venezuela, Guyana), Africa (Guinea), Asia (India, China), Russia, Kazakhstan and Europe (Greece).Jul 20, 2002

    But you are right about the “highest quality” – the bauxite in Guyana can be used for aluminium and to replace asbestos in kilns.

  • Ron. Persaud  On July 24, 2015 at 1:04 pm

    My attention must have wandered during a “Geography” class in fourth standard. Thanks for catching the error.

  • Clyde Duncan  On July 24, 2015 at 3:30 pm

    Ron: Does Saguenay Shipping ring a bell? That is a place in Quebec, Canada. You should listen up on the stories the crew tells: They paid well and they preferred the West Indies and Guyana run; because of draft restrictions in the Demerara River, they would part-load at Mackenzie and top up at Chaguaramas, Trinidad. They partied in Mackenzie, but had to stay on-board in Trinidad.

    I got no proof, but the crew started drinking too soon, one night, when the vessel drifted away from the wharf … it could just be entertaining talk – who knows what Demerara Rum could do to men?

    Here, if you want to read Anansi story – check this out:

    http://www.shipsnostalgia.com/showthread.php?t=4061

  • Clyde Duncan  On July 24, 2015 at 11:05 pm

    Recovering the Essequibo, One Cédula [writ] at a Time – Caracas Chronicles:
    by Gustavo Hernandez Acevedo

    The Essequibo rift is getting more complicated than ever, especially after last week’s events in Brasilia.

    Even after Foreign Minister Delcy Rodriguez went on State TV to claim victory using not-so-diplomatic language (“…las nuevas autoridades de Guyana salieron con las tablas en la cabeza”) the fact that UNASUR will have a special meeting next month to discuss this issue isn’t good news for Venezuela.

    These developments have not slowed Maduro’s brand new “Essequibo strategy”, which will have its own quasi-ministry to implement it: the Essequibo Rescue Office, to be led by the former Army Colonel and expert on the issue, Pompeyo Torrealba. So Maduro’s strategy for the Essequibo is more bureaucracy!

    Years ago, Torrealba wrote the book “A un siglo del despojo: la historia de una reclamación“, in which he makes the case that Venezuela has legitimate rights over the claimed territory. He’s also the head of the NGO National Movement for the Rescue of the Essequibano and the Essequibo (MNARDEE), in order to rally Venezuelans around the Essequibo cause.

    Now, he will lead the central government’s efforts to win the hearts and minds of the Essequibo’s inhabitants. One of his first initiatives is to give them Venezuelan ID cards (cedulas de identidad). Months earlier, he said that at least 200,000 residents have the right to get our documentation, even if they end up having double nationality.

    But Georgetown isn’t pleased with the idea, and Guyanese Minister of State Joseph Harmon said that Guyana “…will stoutly resist any effort to have our people issued with cards…”.

    Meanwhile, Guyanese Foreign Minister Carl Greenidge rejected the UN’s offer of retaking the Good Offices process, which the administration of Granger’s predecessor Donald Ramotar dropped out of back in March. In his view: “The only option that is left would be for a judicial resolution of this matter.” Of course, Maduro doesn’t like it one bit.

    Torrealba’s work will include pushing the Essequibo issue in schools, colleges and the mass media. But he faces many challenges, including sometimes the words of his bosses, like what Delcy Rodriguez told VTV over the weekend:

    “There hasn’t been in the history of that country a government … that has favoured the development of the Cooperative Republic of Guyana’s people like Venezuela has done, specially in the last ten years.”

    She basically called Guyana “ungrateful bastards.” Way to go, Delcy.

    MNARDEE – http://translate.google.ca/translate?hl=en&sl=es&u=https://sites.google.com/site/mnardee/&prev=search

  • Ron. Persaud  On July 25, 2015 at 2:59 am

    Growing up in Albuoystown, I could not escape the influence of Sprostons, the dry dock and Saguenay. The names of the Saguenay ships were prefixed with “Sun” as in “Sunamelia” and “Sunhenderson” (the only two I can immediately recall). Sprostons was the major employer in that part of town. The waterfront from Sussex, past Broad Street to ‘Olympic Theater’ was all Sprostons
    The dry dock held a fascination for me,
    The ‘Canje Pheasant’ was a legend; and my father took me on a trip just to point out the areas in which he had worked. In conversation, “Mr. Deighan” was uttered in hushed tones. He was the Naval Architect in charge of building the “Pheasant”.
    I am told that a sailor on shore leave got quite drunk and his mates were in a quandary as to how to sneak him aboard. A fruit vendor sold them some limes which she promptly cut in halves and rubbed them all over the errant sailor’s face. In fifteen minutes he had sobered up to walk up the gang plank under his own steam.
    And from that, we got “Limacol – the freshness of a breeze in a bottle”.

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