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Posts Tagged ‘Guyana’

Are the days of big offshore finds over? No!

Posted in Offshore Energy - General, tagged , , , , , , , , on June 22, 2026| Leave a Comment »

Norwegian Minister of Petroleum and Energy, Terje Aasland, officially opened Johan Sverdrup Phase 2 – Equinor photo

JL Daeschler shared an interesting opinion piece. He and I are in general agreement with the author, Steve Sasanow. Key points:

  • Steve finds Equinor’s recent comment that the days of big offshore finds are over to be disingenuous. He correctly notes that this view has been echoed for decades. (Although the end of Gulf of America oil production has been predicted for 40 years, 2025 was a near record year.)
  • Offshore Norway, it was only in 2010 that the giant Johan Sverdrup field was ‘found’ by Equinor. Two super-majors – Exxon and Total – missed the reservoir and abandoned further exploration in the area. (How many times have we heard similar stories in the oil patch?) Equinor, then Statoil, made a relatively small find in the middle of the reservoir and was planning a limited subsea development. Geophysicists from partner Lundin created a better picture of what was in place – nearly 3 billion barrels with peak production of 750,000 b/d three years ago. Just this week, Equinor announced Phase 4 of production through further subsea development.
  • Who heard much about Guyana a decade ago?
  • How about the major new discoveries offshore Brazil? See the video below.
  • New production offshore Namibia, South Africa, and Mozambique looms. Finds off Indonesia and Timor Leste, and even the Falklands, await development.
  • “So guys, stop making out that life is tough. It might be challenging, but it has always been thus. Big risks and big rewards.”
  • On BP’s announcement that they were reorganizing into upstream and downstream divisions: “Wow – what a great idea! How come no one ever thought of this before? Imagine this scenario – oil companies making money on both sides of the price cycle – upstream when the price of oil is high and downstream when it is lower. Amazing – NOT!” 😉

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Chevron gets Stabroek; US employees get pink slips

Posted in energy policy, Guyana, Offshore Energy - General, tagged , , , , , , , on June 16, 2026| Leave a Comment »

The oil patch is known for booms, busts, mergers, and acquisitions. Hess is now among the once important offshore operators that no longer exist as separate companies. Others include Amoco, Arco, Texaco, Getty, Gulf, Unocal, Sun, Anadarko, BHP, Mobil, Phillips, Noble Energy, Pennzoil, Kerr-McGee, Superior, Nexen, and Newfield.

Hess would probably not have been a Chevron target had they not taken a chance in 2014 when they obtained a 30% position in Exxon’s Stabroek block offshore Guyana. The rest is history, and Stabroek is now the world’s most prized offshore block. Hess had other nice assets in the Gulf, Bakken Shale, and elsewhere, but Stabroek was Chevron’s primary target.

Paying the price for the Hess acquisition are up to 8,000 employees who will be axed by the end of 2026, starting with 575 cuts at the former Hess Tower in Houston on September 26 and matched reductions in Texas, California and North Dakota. The cuts also have to be disappointing to the Federal, Texas and North Dakota governments, given their strong support for oil and gas production. Mass layoffs don’t equate to energy dominance.

Why is the loss of Hess is significant:

  • Hess was a safety compliance leader in both 2023 and 2024.
  • Hess was an active participant in pre-merger lease sales.
  • The combined company is unlikely to be greater than the sum of the parts in terms of US lease acquisition, exploration, and development.
  • Combining companies limits the diversity of geological assessments and exploration strategies.
  • Consolidation limits participation on committees engaged in assessing technology and developing standards. Declining industry participation in these activities, which are critical to offshore safety, has been a historical concern of OCS program leadership.

When the merger was announced, Chevron’s CEO Mike Wirth was quoted as saying “We’ve got too many CEOs per BOE, so consolidation is natural.” That comment makes sense from the perspective of an acquiring CEO. Employees of the companies being acquired have a somewhat different view. They would prefer increasing exploration and production rather than reducing employees.

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AI to geophysicists: “You’re fired!”😉

Posted in Offshore Energy - General, drilling, tagged , , , , , , , on June 10, 2026| Leave a Comment »

Offshore Guyana seismic line

Oil Now Guyana reports that an Exxon artificial intelligence model built using Guyana’s offshore seismic data was able to identify already-discovered crude oil accumulations with a 90% success rate.

Neil Chapman, Exxon: “…in Guyana, we have built an agent, a model…which if we give it the seismic data that we’ve run and we say, go find the crude oil, it can find all the crude oil that we’ve already found with a 90% success rate.”

(Note: Humans are also great at identifying discoveries after the fact 😉. How many false positives were there?)

Chapman said the company has also used artificial intelligence to review well data from across the industry.

“We have analyzed the well data from 50,000 wells that have been drilled in the industry all over the world, 50,000,” Chapman said. “It would have taken us 15 years to do that analysis. We’ve done it in a matter of weeks.” 

Despite the many advances in exploration technology over the years, one caveat remains unchanged: “We don’t know if they’re going to be successful or not until you drill a hole, you can never be sure,” Chapman said. 

AI should enhance not just geophysical interpretations, but all aspects of offshore exploration and production including site surveys, well planning and construction, drilling, well control, structure designs, production and pipeline monitoring, and safety management. Hopefully, the net result will be increased production at lower cost with improved safety and environmental performance, and that the workforce will not be reduced, but will become more efficient.

Stunning picture taken offshore Guyana

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Guyana’s President slams smug BBC reporter 😁

Posted in climate, Guyana, tagged , , , on January 1, 2026| 2 Comments »

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As expected, the ICC arbitration panel ruled in Chevron’s favor in the Stabroek case

Posted in Guyana, Offshore Energy - General, tagged , , , , , , on July 19, 2025| Leave a Comment »

As posted in January, most analysts predicted that Chevron and Hess would prevail. Now that the arbitration panel has ruled, Chevron’s acquisition of Hess can be completed.

The position of Exxon and its partner, Chinese govt owned CNOOC, never made much sense given that Chevron was not buying the Stabroek share, they were buying the company that holds that share.

The CNOOC position was rather hypocritical given that they acquired their share of Stabroek by buying Nexen, the company that owned it.

Not much attention has been paid to the importance of Chevron’s acquisition of Hess’s Gulf of America assets. The combined company will be the 3rd largest GoM oil producer (behind Shell and bp) and the second largest gas producer (behind only Shell). Hess acquired 20 GoA leases in Sale 261, ranking first in total high bids ($88 million) among all participants.

Lots more on Stabroek.

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Comments on the operator responsibility and unlimited liability provisions of Guyana’s Oil Spill Bill

Posted in Guyana, oil spill response, Regulation, well control incidents, tagged , , , , , , on June 6, 2025| Leave a Comment »

Guyana’s Oil Spill Bill (attached) has much in common with the Oil Pollution Act of 1990 that we implemented for US offshore faciities and the International Convention on Oil Pollution Preparedness, Response and Co-operation that I attended in 1990. A couple of issues warrant highlighting:

Operator/licensee responsibility:The definitions correctly establish the operator or license holder as the responsible party. This means that in the event of a well blowout while drilling from a mobile drilling unit, the licensee/operator would be the responsible party. This aligns with the “operator responsibility” mantra that is fundamental to the US offshore program. Drilling and other contractors are managed by the operator and are the operator’s responsibility.

Unlimited liability: The liability section (Part VI) establishes an unlimited liability standard for the responsible party. As previously discussed in more detail, this is a daunting, open-ended obligation that would trouble permittees in any industry. The unlimited liability provision could preclude responsible independent operators, including Guyanese companies, from seeking licenses.

The unlimited liability standard (par. 17) is qualified with a provision (pasted below) that also favors major international companies.

The unlimited liability provision therefore does not seem to apply to parent companies idemnifying a project. This was a point of contention during the parliamentary debate. The Kaieteur News delves into the issue and is not entirely convinced by the Government’s defense. Their article closes as follows:

It is important to note that stakeholders have argued that since ExxonMobil Guyana Limited (the responsible party) does not have adequate assets, the burden of oil spill-related costs could be left on Guyana, especially in the absence of unlimited coverage from the parent company. These and other “flaws” have prompted Guyanese to urge President Irfaan Ali not to assent to the Bill, passed in the National Assembly on May 16, 2025. Be that as it may, the Ministry maintained that the “robust statutory framework now established protects Guyana and its people.”

Oil-Spill-Bill-2025Download

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Stabroek arbitration hearings conclude; both sides confident

Posted in Guyana, Offshore Energy - General, tagged , , , , , on May 30, 2025| Leave a Comment »

Exxon senior vice president Neil Chapman said he was confident that a three-member arbitration panel would rule in Exxon’s favor and determine it had a right-of-first-refusal to purchase Hess’ stake in a Guyana oil joint venture operated by Exxon.

Hess: “We remain confident that the arbitration will confirm the Stabroek right of first refusal does not apply to the merger.”

A ruling is expected in 2-3 months.

The China factor

Should the govt of Guyana have intervened?

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Stabroek super-major showdown – who ya’ got? Chutzpah award for CNOOC?

Posted in energy policy, Guyana, Offshore Energy - General, tagged , , , , , , on May 8, 2025| Leave a Comment »

On May 26 in London a three-judge International Chamber of Commerce panel will finally begin considering the Exxon claim that the Stabroek joint operating agreement grants them the right-of-first-refusal in Chevron’s acquisition of Hess’s 30% share of the massive field (>11 billion boe) offshore Guyana.

Exxon’s position claim seems weak to most analysts given that Chevron is not buying the Stabroek share; they are buying the company (Hess) that holds that share.

Exxon’s rather unlikely ally in this case is state-owned China National Offshore Oil Corp. How did CNOOC get a stake in Stabroek and why is their position on the Hess acquisition hypocritical?

CNOOC became a 25% Stabroek partner by acquiring Canadian Nexen in 2013. Their Nexen acquisition, which included Canadian, US, and international assets, was only reluctantly approved by the Canadian and U.S. governments, and probably would not be approved today.

CNOOC’s Stabroek acquisition is thus very similar to Chevron’s. In both cases, the entire company, not just the Stabroek asset, was acquired.

The Stabroek acquisition has proven to be most fortuitous for CNOOC, not only because of the oil and gas resources, but also through the deepwater development expertise that has been gained. Now CNOOC is trying to further leverage their Stabroek position by joining Exxon in challenging the Chevron acquisition.

It would be great if the arbitration proceedings were streamed, but that will not be the case. It also appears unlikely that media will be allowed to attend or that transcripts will be made available.

As previously noted, I would have liked the Guyanese government to be more assertive in this dispute. Stabroek is Guyana’s offshore gem, their most important economic asset. This lengthy dispute has to affect partner teamwork and communication. From safety, environmental, and production standpoints, do you want feuding partners managing such an important national asset?

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Preliminary International Court of Justice decision favors Guyana

Posted in Guyana, Offshore Energy - General, tagged , , , , on May 1, 2025| Leave a Comment »

Pending a final decision in the Guyana-Venezuela dispute, the Court ordered Venezuela to refrain from conducting elections or preparing to conduct elections in the disputed territory administered by Guyana.

The outcome of this case has major implications for oil and gas development offshore Guyana.

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Tension offshore Guyana

Posted in Guyana, Offshore Energy - General, tagged , , , , , , , on March 1, 2025| Leave a Comment »

Exxon’s Prosperity FPSO
Guyana President Dr. Irfaan Ali chairs a meeting of the Defense Board in response to a Venezuela Navy vessel’s incursion into the Guyana’s EEZ

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