Guyana’s Vice President Bharrat Jagdeo said ExxonMobil has communicated to the government its prioritization of gas development.
“Exxon has said, ‘we have moved this up to a priority now.’ We now have a company that is interested in moving it forward, and the government is there to push it along,” Jagdeo said during a June 27 press conference.
Until now, much of Jagdeo’s public statements had indicated concern that Exxon is not as interested in gas development as the government.
The government recently identified U.S. start-up Fulcrum LNG to work with Exxon to come up with a plan for the development of the gas. Government had previously stated that developing the gas was “not an immediate priority” for Exxon. It said this is why the administration had embarked on the process that ended up with the selection of Fulcrum as a partner, potentially having to carry out the activity on its own.
“That is the less desirable of the two options… Right now, we’re in collaboration mode,” Jagdeo said.
Head of Exxon’s Upstream Company, Liam Mallon told OilNOW in a Feb. 20 exclusive that building out a robust and lucrative gas sector takes time. He said, “It’s still early days in the exploration process,” pointing out that there’s a good amount of gas found so far, and that it will likely be monetized.
“We’re excited – it will take some time to properly de-risk and appraise…but we’re very lined up with the government’s intent and very supportive of the attempt around making gas a vital component of the future,” Mallon commented.
Jagdeo made it clear that the government prefers for Exxon to be involved in the country’s first standalone gas development. “The best option would be to have Exxon involved because what they can do in the development of some of these wells, particularly where there is more gas, you have a great deal of condensates too, oil in those fields that they can monetize and they will have another stream of revenue,” he stated.
Meanwhile, Jagdeo vouched for Fulcrum’s ability to pull its weight, noting big-name partners in its proposal, like Baker Hughes, McDermott and Solaris.
The Guyana Vice President said the company proposed Environmental Resources Management (ERM) as an environmental partner, and that with respect to financing, the proposal included the United States Export-Import Bank and some private equity firms.
Jagdeo also reiterated that the selection of the company does not constitute a conflict of interest. He said Exxon confirmed that there is no conflict with respect to its former executive, Jesus Bronchalo, being Fulcrum’s founder.
Exxon, Fulcrum, and a Guyana government technical team are expected to deliberate on the potential project, with hopes for an agreement to be signed in 2025.
The project would be the first standalone gas development offshore Guyana. Thus far, an Exxon-led group has sanctioned six oil developments with three already producing 630,000 barrels per day (b/d). A seventh project is now in the application phase.