John Hess, Chief Executive Officer of Hess Corp., is confident in Guyana’s stability ahead of the South American nation’s general and regional elections this year.
Hess holds 30% of the shares in Guyana’s Stabroek Block. CNOOC is a partner, and ExxonMobil holds the operatorship.
Speaking on potential risks, Hess touched on two key factors that reduce concerns for investors. “First of all, the Opposition party is very supportive of the joint venture, just as the current ruling party is,” Hess said.
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He also pointed to assurances from Guyana’s President, Irfaan Ali, who was recently asked if the government might use the elections as an opportunity to renegotiate the 2016 Production Sharing Agreement (PSA).
“He was categorically, very, very clear: no, we are not going to touch the Production Sharing Agreement. We want the joint venture to continue to aggressively invest to bring the oil wealth so it can become the people’s wealth of the country,” Hess said.
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On external factors, Hess addressed Venezuela’s past actions, including military activities near Guyana’s border as the two are currently embroiled in a border controversy. He downplayed their significance, citing geopolitical checks in the region. “The Venezuela issue, where they saber rattled during the time that [Nicolás] Maduro was running for re-election, that has gone and passed,” he said.
He added that recent border tensions involving Venezuelan soldiers are unlikely to escalate. “By the way, they couldn’t go in, the only way they could go in the country is through Brazil, and [President] Lula’s not going to let that happen,” Hess stated. The U.S. government also intervened to deter Venezuela.
“I see the political risk being very low and the fiscal risk being very, very low,” Hess concluded.
Guyana’s election is expected in November, according to statements from the government. After a tumultuous 2020 election season, all eyes will be on Guyana’s election authority to see whether a smooth transition of power will be upheld.
