(Oilprice.com, Irina Slav, 24.Dec.2018) — Exxon has suspended exploration activities in the western part of the Stabroek block offshore Guyana after the Venezuelan Navy intercepted this weekend two exploratory vessels in what Caracas claimed was Venezuelan waters, Reuters reports, citing Guyana’s Foreign Ministry.
The Guyanese ministry’s statement claimed the incident had occurred in its territorial waters and slammed Caracas for the interception, which, according to Guyana, “violates the sovereignty and territorial integrity of our country.” The statement said Caracas’s behavior threatened Guyana’s economic development and called the interception an “illegal, aggressive and hostile act.” Guyana will report the case to the United Nations.
Caracas, for its part, said it has already told the United Nations about the run-in, which it said was in Venezuelan territory, adding the vessels had turned around after their crews were told they were out of Guyanese jurisdiction.
The territorial dispute between Venezuela and its tiny neighbor Guyana is not new: Caracas has claims to the offshore territory that Guyana opened up for oil exploration even though a tribunal in the past ruled it belonged to Guyana and Caracas initially accepted the ruling.
Now, however, Exxon has discovered as much as 5 billion barrels in reserves in the Stabroek block, which has once again turned the attention of Venezuela to the disputed waters. For the supermajor, Guyana is a top priority after all these discoveries and a recent report by Wood Mackenzie says the tiny nation could become the second-largest oil producer in South America, behind only Brazil, surpassing Venezuela.
In the three years since Exxon won the rights to develop Stabroek, the company, together with its partner Hess Corp., has made 10 sizeable discoveries. There are another 17 prospects yet to be drilled, which could boost the reserve estimate for Stabroek even further.
Commercial production from Stabroek is slated to begin in 2020 at the first production well, Lisa-1, which is expected to pump 120,000 bpd of crude and natural gas.