- An ExxonMobil-chartered seismic ship offshore Guyana was intercepted by the Venezuelan navy.
- John Hess, the CEO of Hess, a member of the ExxonMobil-led consortium has planned to move to an international court for resolution with the support of United Nations.
- ExxonMobil owns 45% of Stabroek and operates the block, while Hess owns 30% and CNOOC has 25%.
According to spglobal, the arbitration of the interception of an ExxonMobil-chartered seismic ship offshore Guyana by the Venezuelan navy in December will move to an international court for resolution, John Hess, the CEO of Hess, a member of the ExxonMobil-led consortium, says a report published in Platts.
Confrontation
The December 22 confrontation ended a few hours after the Venezuelan navy ship moved away from the area a few hours after confronting the seismic vessel. But in early January, Guyana’s foreign affairs minister, Carl Greenidge, speaking to the country’s National Assembly, called formally upon Venezuela to present its case to be arbitrated before the International Court of Justice in The Hague.
What happened?
The incident occurred in the northwest portion of the Stabroek Block, more than 68 miles from the nearest of 10 oil discoveries made by the ExxonMobil-led consortium offshore Guyana since May 2015. The incident took place about 120 miles from the first infrastructure for the project, now under construction by the consortium, which also includes China’s CNOOC. The development, Liza Phase 1, targets first oil early next year.
ExxonMobil owns 45% of Stabroek and operates the block, while Hess owns 30% and CNOOC has 25%.
At the time of the incident last month, Guyana’s government called the Venezuelan navy’s interception of the seismic vessel “illegal, aggressive and hostile,” adding it was a “real threat to Guyana’s economic development.” The two countries have disputed areas offshore the Guyana coast even though the issue was settled by arbitration in 1899.
Liza Phase 1 development
On Wednesday during Hess’ Q4 2018 earnings conference call, John Hess said exploration and development continues in southeast Stabroek, where most of his consortium’s discoveries have occurred.
Mr.John Hess commented that the activities related to Liza Phase 1 development, which is expected to produce up to 120,000 b/d of oil equivalent, are unaffected. The issue is diplomatic and will have to be handled by the court. The United Nations fully supports the Guyanese position, the United States fully supports the Guyanese position, as well as CARICOM – an organization made up of 15 Caribbean nations. But at the end of the day, they are fully optimistic and encouraged that the Guyanese position will prevail.
Political and social turmoil
ENI’s 2018 World Oil Review put Venezuela’s oil reserves at nearly 303 billion barrels, ranking it first globally. But the country’s production has been falling after widespread political and social chaos in the Latin American country. In December, the country pumped just 1.17 million b/d, according to S&P Global Platts’ most recent survey.
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Source: SPGlobal
