By: Staff Writer
May 7, 2024
Less than a month after the oil giant Exxon moved forward with it sixth offshore development in Guyana, the company is facing two legal battles and a temporary shut down.
Guyana’s tax agency is taking Exxon Mobil Corp. to court after one of the company’s suppliers said it mistakenly inflated the value of oil-well equipment by 200 times to about $12 billion.
Exxon’s representatives claim it was a clerical mistake where the amount presented was in US dollars and not Guyanese dollars and they made the correction to the system. However, this has not stopped Commissioner-General Godfrey Statia of the Guyana Revenue Authority from issuing a summons.
Exxon is also in a dispute with its rival Chevron over Guyanese oil assets which Exxon’s chief executive officer claims could linger on into 2025.
Exxon CEO Darren Woods said Monday that the dispute with Chevron over Hess Corporation’s oil assets in Guyana likely will not be resolved until 2025.
“My view is it will go into 2025,” Woods told CNBC’s David Faber at the Milken Institute’s Global Conference in Los Angeles. Hess had previously indicated that the case could drag into next year.
“This is an important arbitration obviously not only for Exxon Mobil but for Chevron and Hess,” Woods said. “What we need to do is take our time to do what’s right to make sure that we do all the due diligence and we get to the answer — the right answer.”
Exxon is claiming a right of first refusal on Hess’ assets in Guyana under a joint operating agreement that governs a consortium that is developing the South American nation’s prolific oil resources. The oil major filed for arbitration in March at the International Chamber of Commerce in Paris.
All at the same time, Exxon is shutting its operations in Guyana down for two weeks. The giant will shut down two offshore oil production projects in Guyana for two weeks each between July and August to connect a natural gas pipeline.
According to Reuters, Alistair Routledge, president of Exxon’s Guyana business, said that the 225km gas pipeline will feed Guyana’s $1.9bn gas-to-power Stabroek project, which aims to end the country’s reliance on imported fuels and lower energy costs for residents.
Offshore production vessels will be connected to a power plant and a natural gas processing facility by the proposed pipeline, with the power plant and transmission lines not becoming fully operational until the end of 2025.