Exxon Resumes Seismic Survey in Guyana

© Daniil Belyay / Adobe Stock
© Daniil Belyay / Adobe Stock

Exxon Mobil Corp has resumed seismic exploration for oil and gas off of the coast of Guyana after halting work in December due to a run-in with the Venezuelan navy, a Guyanese government official said on Tuesday.

Vessels have been able to travel unimpeded since the incident, said Minister of Business Dominic Gaskin in an interview at Rice University in Houston where he addressed a group of business executives.

"That was a one-off on Dec. 22 and we haven't heard any reports of a recurrence," Gaskin said. He was in Houston to promote the country's oil and gas and business development opportunities.

Exxon is focusing its seismic work in the southeast portion of the large Stabroek block, Exxon spokeswoman Suann Guthrie said on Tuesday.

A Venezuelan navy helicopter had intercepted and sought to land on a seismic vessel operated for Exxon by Petroleum Geo-Services (PGS) in the western side of the block in December, prompting PGS and Exxon to withdraw.

A spokesman for PGS did not immediately respond to a request for comment.

Both Guyana and Venezuela say the incident took place within their territorial waters.

Guyana, one of the poorest countries in South America with no history of oil production, has become the focus of intense interest since Exxon has disclosed finding more than 5 billion barrels of recoverable oil and gas off its shores. That has reignited a century-old territorial dispute with neighboring Venezuela. OPEC-member Venezuela’s crude output is near its lowest levels in 70 years amid an economic crisis.

Exxon also could soon receive an environmental permit for the next phase of development of its Liza oil field, said David Patterson, Guyana's minister of public infrastructure, in remarks to Rice attendees.

The permit has been pending proof that Exxon would be able to cover the cleanup costs of any oil spills.

"I know the (Environmental Protection Agency) director insisted on certain conditions," Patterson said at the Rice event. "Those have been met."

Exxon's Guthrie said official permit approval has not been received.

Guyana’s parliament voted late in December a no-confidence motion in the current government, triggering elections to take place later this year. The opposition party had called the no-confidence motion claiming mismanagement of the country’s oil resources.

A potential change in government has sparked questions about whether a new government would see changes to Exxon's contract, which opponents say is highly the favorable to the U.S. oil major.

"We don't foresee any challenges to the contract arising out of the election whether or not the government changes," Business Minister Gaskin said. "I think this is much too important for any interference at this point."

However, new contracts going forward likely will include terms more favorable to the Guyanese government. The country is reviewing contracts, with particular focus on the local content portion, Gaskin said.

That review process has delayed for now applications for government exploration licenses sought by Chevron Corp and others, Gaskin said. 

(Reporting by Jennifer Hiller; Editing by Lisa Shumaker)

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