The oil discoveries made offshore Guyana, 16 of which are located at the prolific ExxonMobil-operated Stabroek Block, are not under any significant risk from Venezuela, despite a border controversy with Guyana that have seen aggressive actions by the Venezuelan Navy in the past.
The two South American oil producing neighbours have a long-standing border controversy which is now the subject of a potential hearing at the International Court of Justice (ICJ). The Court will open public hearings on June 30 on the matter of its jurisdiction to proceed with the substantive case.
In December 2018, the Venezuelan navy intercepted a Bahamas flag-carrying seismic vessel contracted by US oil major ExxonMobil which was carrying out survey works in the offshore Guyana Basin. At the time the vessel had a total of seventy crew members on board including the Captain. The vessel was intercepted in Guyana’s Exclusive Economic Zone and continental shelf. Guyana had rejected what it described as an “illegal, aggressive and hostile act” perpetrated by the Maduro regime.
Following the incident, ExxonMobil had said exploration and development drilling remain unaffected in the southeast area of the Stabroek Block, where the bulk of its discoveries have been made.
IHS Markit Principal Analyst, Ford Tanner, had weighed in on the border controversy and Venezuela’s actions offshore Guyana, following the incident.
“One important point is that those kinds of incursions are in waters that are very far from all the discoveries that have been made,” he said.
The Analyst pointed out that IHS Markit does not envision the Venezuelan navy going far into the eastern maritime space of Guyana to disrupt the oil exploration and development activities.
“Even though much of these waters are disputed, these discoveries are actually in a relatively low-risk area,” he stated.
Tanner also raised the issue of China’s influence over Venezuela and the fact that its state oil company – CNOOC – is a co-venturer at Guyana’s Stabroek Block.
“CNOOC – China’s National Offshore Oil Company – is a minority partner in the ExxonMobil-Stabroek Block Consortium…Beijing represents an important check on Venezuela economically and that could be absolutely to CNOOC’s benefit in this particular instance,” he pointed out.
ExxonMobil began producing oil offshore Guyana at the Liza Phase 1 Development in December 2019.