Exxon Touts Guyana Growth in Race For Next Decade’s Oil Fields

Darren Woods Photographer: Andrey Rudakov/Bloomberg Photo by Andrey Rudakov /Bloomberg

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(Bloomberg) — Exxon Mobil Corp. is betting the economic boom unleashed by its giant discovery in Guyana will give the company an edge when negotiating fiscal terms with other nations looking to develop their own oil and gas reserves. 

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The US supermajor says the breakneck production growth in the South American country shows Exxon can build oil projects faster and more efficiently than its competitors. It’s a “unique value proposition” that will ultimately make more money for countries — and Exxon, Chief Executive Officer Darren Woods said in an interview.

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“We’re going to bring something unique to you that has great value to you, and then we expect to be compensated for that,” Woods said. “That’s the proposition that we’re making to basically all the resource owners and our customers.”

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The world’s largest energy companies are locked in a global race to secure new resources as investor concerns shift from climate change to the longevity of their oil and gas reserves. Chevron Corp. is reviving exploration efforts while Shell Plc and BP Plc are pivoting back to fossil fuels after their ventures into lower-carbon energy fell flat. But Exxon believes its unwaivering faith in oil and gas combined with its ability to build complex projects on time and on budget is a competitive advantage. 

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“We can see that in Guyana,” Woods said. “In all the things where we’re executing, where we’re the operator, that we’re delivering differentiated results. Importantly, our industry peers can see it, and the resource owners can see it.”

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Guyana produces nearly 1 million barrels a day — more than neighboring Venezuela — up from nothing just over six years ago. It has transformed the formerly impoverished South American country into one with a sovereign wealth fund worth $3 billion and growing. The boom is not without its problems — citizens worry about the government’s dependence on Exxon, inflation and potential environmental liabilities — but it has also created one of the fastest-growing economies in the world.   

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The changing face of the Caribbean nation was on full display at a Guyana energy conference this month, where the world’s top oil executives mingled in new hotels, restaurants and high-end retail outlets along the Atlantic shore front in Georgetown, the country’s capital. But trash-filled drainage ditches and a rising cost of living in a country where the public sector minimum wage is less than $500 a month are a reminder Guyana’s newfound wealth has yet to reach most of the population.

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To this end, Exxon plans to invest $100 million in Guyana’s education system over the next decade to build up science, technology, engineering and math skills, especially among high-schoolers. The company plans to build science, technology, engineering and mathematics workshops in each of the country’s ten regions to provide after-school lessons for mostly low-income teenagers in an effort to prepare the future workforce. 

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Modeled on two centers in Houston, they will provide courses in computer-aided design, electronics and robotics while also helping with college applications. If successful, Exxon intends to build similar centers in other locations where it operates, including the Permian Basin in West Texas and New Mexico.