Yearly Archives: 2024

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Jagdeo refuses to update nation on efforts to recover Guyana oil profits used by Exxon for works in Kaieteur and Canje blocks Aug 02, 2024 News Kaieteur News – Vice President Bharrat Jagdeo has refused to update Guyanese citizens on the progress government has made to recover monies the auditors revealed was spent by oil giant Exxon Mobil from the Stabroek block to pay for works done in the Kaieteur and Canje blocks. The VP was addressing the media on Thursday during his weekly press conference at the Freedom House on Robb Street. Vice President Bharrat Jagdeo. Jagdeo, the chief policymaker in the oil and gas sector has refused in recent months to answer a number of important questions crucial to his portfolio. Among the questions are: the status Guyana’s oil reserve; the rental fee Exxon is paying for the capping stack it recently brought into the country and how much the company is paying to treat produced water from its offshore operations. Jagdeo has also refused to provide a comprehensive updates on the audit findings as well as the interest rates being charged by ExxonMobil Guyana Limited (EMGL) on its investments. On Wednesday he was asked by the Kaieteur News to say if there were “Any development to recover the money the auditors discovered Exxon spent in the Kaieteur and Canje oil blocks?”  Jagdeo responded: “So the last time you said that the minister doesn’t want to answer some of your questions. So he will have a press conference and all of these routine things, that are not policy-based you can find out there.” This publication reported previously that the audit team that reviewed ExxonMobil’s US$7.3 billion expenses, incurred between 2018 and 2020, found that the company used $323 million of the revenue generated in the Stabroek Block to purchase vehicles that were used for operations in the Kaieteur and Canje Blocks. According to the report completed by the auditors, ExxonMobil Guyana Limited (EMGL)- previously Esso Exploration and Production Guyana Limited (EEPGL)- the operator of the Stabroek Block included in its cost recovery statement 100 percent of the costs for various vehicles. The auditors, however, determined that the vehicles purchased were used for all of Exxon’s operations, including those outside of the Stabroek Block. Consequently, auditors informed the company that the costs should be allocated across the blocks. In response to the findings of the auditors, ExxonMobil confirmed that the vehicles charges were deducted from the Stabroek block. The company, however, disagreed that that the vehicle costs should be shared. Auditors said Exxon “verbally advised that the 100 percent charge to Stabroek was proper because, paraphrasing, the reason the Contractor was in the country was because of Stabroek operations.” The report highlighted that US$1,617,143.85 in vehicles were purchased during the period 2018 to 2020 from Beharry Automotive LTD, Ideal Autos Inc., and Massy Motors Guyana LTD. This amounts to just over GYD$323 million.  Even though government has said that this use of the Stabroek Block funds to offset expenses in the other blocks is illegal, Exxon will not be facing any penalties of any sort.  Jagdeo had said at a previous press conference that the contract the oil giant signed with Guyana means that the expenses will not be included in the cost bank for the Stabroek Block. “I maintain my position that it would be illegal and I repeat that. The audits would have revealed that now and as I said before there will be consequences. If you did unauthorised work you don’t go to jail according to PSA, it just doesn’t form part of the cost bank,” the VP said. Related Similar Articles

ExxonM and Chevon’s fight over oil-rich Stabroek Block drags on Aug 02, 2024 News …as Hess suffers worst shares drop in 20 months over delays Kaieteur News – Chevron and Exxon are headed to a May arbitration hearing in the latest chapter of their ongoing dispute over the massive Stabroek Block oilfield off the coast of Guyana. Chevron said Wednesday in a filing with the Securities and Exchange Commission it expects a decision within three months of the hearing. The Houston-based company added it had expected and requested to hold the hearing earlier, but the common schedules of the parties made it impossible. The companies have been locked in a dispute since February, when Exxon threatened to block Chevron’s acquisition of a 30% stake in the Stabroek Block, which is said to contain at least 11 billion barrels of oil. Ongoing arbitration hinges on the applicability of a “right of first refusal” contained in an operating agreement between subsidiaries of Exxon, Hess and China National Offshore Oil Corporation. An abrogation of the deal could throw into question Chevron’s $53 billion acquisition of competitor Hess, which closed in October. Chevron said in the filing that its views and those of Hess remain unchanged, while claiming that Exxon and CNOOC “continue to ignore the plain language of the operating agreement.”  Exxon operates all production in Guyana, controlling a 45% stake while Hess and CNOOC serve as minority partners. Exxon and CNOOC Ltd filed arbitration claims claiming a pre-emption right to any sale of Hess’ lucrative stake in a Guyana oil-producing joint venture. The challenge threatens to block Chevron’s biggest deal since its 2001 acquisition of Texaco for $36 billion. Exxon and CNOOC have argued Chevron’s bid for Hess triggered a right of first refusal clause in their Guyana joint operating agreement. Chevron and Hess dispute that claim. The all-stock sale, announced last October, has been stalled by a second request for information by antitrust regulator, the U.S. Federal Trade Commission. Its review should be completed this quarter, a spokesman for Hess said. Meanwhile, shares in the U.S. oil producer Hess suffered their largest daily percentage drop in 20 months on Thursday on fallout from the lengthy new delay to its proposed sale to Chevron. Reuters reported. Hess’ stock fell $11.25, or 7.35%, the largest daily percentage drop since November 2022. Chevron shares were also off 4%, or $6.57, at $153.93 in midday New York trading. Kaieteur News reported on Thursday that Hess Corp (HES.N), beat estimates for second-quarter profit on Wednesday, helped by sharply higher oil production in Guyana and stronger prices. A Reuters report stated that Hess’s production rose 27.6% to 494,000 barrels of oil and gas per day (boepd), on nearly 75% year-over-year increase in Guyana to 192,000 bpd. Its Bakken shale output also rose, the company said. It, however, expects a fall in current-quarter production due to planned downtime in Guyana and Southeast Asia. Third-quarter net production is expected to be in the range of 460,000 boepd to 470,000 boepd. Hess said it expects its Guyana output to fall 10% as a natural gas pipeline is connected this quarter, and expects its North Dakota output to drop 4.5% on planned maintenance. The company’s average realized crude oil selling price also rose nearly 13% to $80.29 per barrel in the second quarter. A three-person arbitration panel is expected to decide on the dispute with Exxon. Exxon believes the process could extend to 2025 while both Chevron and Hess expect a resolution by the end of the year. Hess’ quarterly profit of $2.62 per share beat analysts’ average estimate of $2.48 per share, according to LSEG data. Back in April Hess Corporation had announced that its profits leapt by $626M in the first quarter of 2024 thanks to higher production volumes in the Bakken shale in the US and the Stabroek block offshore Guyana. Back then Hess’ net income, the company said, was US$972M in the three months ended 31 March, compared to $346 million in the first quarter of 2023, according to the company’s latest earnings report. This would mean that Hess’s profits have almost tripled over the previous reporting period. According to Hess, its overall net production of oil and gas was 476,000 barrels of oil equivalent per day, up 27 percent from 374,000 barrels of oil per day (bpd) in 2023. The Bakken production surged by 27,000 (bpd), according to Hess, “while Guyana offered up an additional 78,000 (bpd) this quarter.” The first quarter results “substantially outperformed” expectations, according to a report from analyst firm TD Cowen back then. Overall production beat projections by 9 percent, while Hess’ Guyana output beat consensus by 28 percent, Cowen had noted. Related Similar Articles

Man arrested for sending threatening email to US Embassy Aug 02, 2024 News Kaieteur News – Anand Persaud, a 31-year-old man from Sisters Village, West Bank Demerara, and former employee of the United States Embassy in Georgetown, is in police custody after he was arrested for allegedly sending a threatening email to the Embassy’s email address. Suspect: Anand Persaud The email which was sent last Thursday (July 25, 2024) contained threats directed towards United States Government personnel and the Embassy’s Georgetown facility, a police press release stated. Consequently, security officials of the US Embassy made a formal report of the threat to the Criminal Investigation Department (CID) Headquarters. Based on diligent investigation by detectives with assistance from overseas law enforcement personnel, the 31-year-old suspect, a former security guard attached to the Embassy, was arrested by detectives at his Sisters Village address and escorted to CID Headquarters.  Further investigations were conducted, and investigators were able to link the suspect to the email address that was used to send the threatening email to the Embassy.  The investigation is ongoing. Related Similar Articles

‘No extension to CGX licencse for offshore exploration’ Aug 02, 2024 News  – Jagdeo says company not forthcoming with information requested Kaieteur News – Cabinet is highly unlikely to extend the exploration license granted to CGX Energy Inc. and Frontera Energy Corporation, joint venture partners in the Corentyne Block offshore Guyana,  Vice President Bharrat Jagdeo has said. The Guyana Government said it is not inclined to grant an extension to CGX license Despite the company’s hopes for additional time to assess oil prospects, the government remains cautious. During his weekly press conference on Wednesday Jagdeo expressed dissatisfaction with recent responses provided by CGX to a series of government inquiries. In response to questions at a news conference on Wednesday at Freedom House, Robb Street, Georgetown, he said, “Cabinet is not inclined to grant an extension to the license”. He emphasised that while the company had been given some time to return with further updates, the information provided so far was insufficient. “We are not inclined to give any extension but [Cabinet] still wants some additional information,” he added. According to Jagdeo, the company currently holds no license, relieving the government of immediate pressure to address the issues. CGX had retained a small portion of the Corentyne Block, having relinquished much of it as per its exploration agreement with the government. In 2023, CGX discovered oil at its Wei-1 well, located 14 kilometers west of the Kawa-1 discovery within the block. Although oil was found at Kawa-1 in January 2022, CGX and Frontera chose to focus on the Wei-1 well. Further drilling in the Corentyne Block was said to depend on positive results at Wei-1, with the joint venture reportedly having no further obligations beyond this well. In a recent notice of potential commercial interest submitted to the Guyana Government, the joint venture sought additional time to appraise the Wei-1 discovery and evaluate its viability. Back in May this year this newspaper reported that Houlihan Lokey, a leadIng global investment bank and capital markets expert was supporting active pursuit of strategic options for the Corentyne block, including a potential farm down, as it sought to develop the potentially transformational oil investment in one of the most attractive oil and gas destinations in the world today, Guyana. This was disclosed to minority shareholder in the Corentyne Oil Block, CGX Energy Inc., which had released its unaudited Consolidated Financial Statements in May for the first quarter of 2024, which included a number of other transactions completed by the oil company and its partner, earning itself more cash. The Company is the operator of the Corentyne block and currently holds a 27.48 percent working interest, while Frontera Energy Guyana Corp (“Frontera Guyana”) holds the remaining 72.52 percent interest in the block. To this end, the company reported that the 2023 JOA (Joint Operating Agreement) Amendment was completed during the fourth quarter of 2023, pending approval from the Government of Guyana. Additionally, it was reported that according to the final cost of the Wei-1 well, the Company would have the right to receive from Frontera Energy Guyana Corp., a wholly-owned subsidiary of Frontera Energy Corporation a reassignment of 0.78 percent participating interest in the Corentyne block. CGX however said back then that pursuant to that certain Closing Letter dated March 7, 2024, between the Company and Frontera Guyana, the Company has instead agreed to receive from Frontera Guyana the re-assignment of a 0.18 percent participating interest in the Corentyne block. This in addition to US$1.5 million cash consideration to cover certain other operating expenses of the Company, and US$0.6 million in settlement of other accounts payable related to the Joint Operations. Additionally, it was reported that during April, 2024, the company received the cash consideration of $1.5 million from Frontera Guyana as part of the 2023 JOA Amendment signed on August 9, 2023. Meanwhile as it relates to the investment bank’s farm into the oil block, CGX said “there can be no guarantee that the review of strategic options will result in a transaction.” The company last year made its second successful discovery offshore Guyana at the Wei-1 Well on the Corentyne Block, approximately 200 kilometers offshore Guyana. Previous reports indicate that the well was drilled in a water depth of approximately 1,912 feet (583 metres) to an anticipated total depth of 20,500 feet (6,248 metres). According to the partners the Wei-1 well encountered 210 feet of hydrocarbon bearing sands in the Santonian horizon. CGX and Frontera had commenced spudding the well in January last year and revealed that the operations would cost an approximate US$190-US$195 million to complete. The Joint Venture had updated its previously announced discovery in the Maastrichtian and the Campanian intervals to 77 feet of net pay. Fluid samples were retrieved from the Campanian and Maastrichtian indicating the presence of light crude in the Campanian and sweet medium crude oil in the Maastrichtian. The joint venture said the drilling operations were successfully completed with no safety incidents while the drilling rig is expected to be released early next month.  It added that the data acquisition program included wireline logging, MDT fluid samples and sidewall cores throughout the various intervals. Over the next few months, results will be integrated into the geologic and geophysical models to form an updated view of the entire northern portion of the Corentyne block. The northern portion of the Corentyne block includes the channel complexes discovered by the Kawa-1 and Wei-1 wells, and a prospective central channel complex, which is yet to be evaluated. The Joint Venture is excited by the definitive presence of oil in the Maastrichtian and Campanian and the presence of hydrocarbons in the Santonian and believes there is significant potential in the block. Earlier this year, the partners said any future drilling in the block would be hinged on the success of the Wei-1 well. After more than 20 years of exploration activity in the Corentyne Block, the Canadian partners finally struck oil in January 2022 at the Kawa-1 well. Kaieteur News in an earlier report detailed that the companies pumped more than US$350 million during that period before landing its first discovery. Prior to its two successful wells, the Canadian Energy companies drilled two wells in the Corentyne Block. These include Horseshoe in 2000 and Eagle in 2012. Related Similar Articles