Jan 23, 2021 News
Kaieteur News – It may sound farfetched, but it is not. Exxon cannot survive without Guyana; at the very least, its hard road in the struggle for a persuasively profitable standing on a consistent basis would be made supremely more difficult. As we have stated and restated at this publication, without Guyana, many of this American oil powerhouse’s prospects become speckled and strained.
Though we have said it before, and numerous times, we will say it again: Exxon’s profitability and its top tier viability depend on its investments in Guyana’s oil sector, with its many oil-rich oil blocks still remaining to be explored and discovered. Of recent, there are some schools of thought from people who should know that there is the potential for what is called a ‘supergiant’ in some of the areas below those waters of ours. In the simplest terms, and to give our fellow citizens an idea of what a supergiant field could mean for this country, such a field would hold the equivalent of many billions of barrels of oil and for several decades to come. There is the example of the Saudi Arabians with its fabulous Ghawar supergiant, which is the stuff of legends.
The Ghawar field was discovered in 1948, which is 72 years ago, and it is still producing several million barrels of oil a day. At one time, for a half-century, this field was responsible for almost two-thirds of all Saudi Arabian oil output. As of 10 years ago, the Ghawar supergiant field had produced over 65 billion barrels of oil. Now, with that in mind, there is some talk of a possible supergiant somewhere in the folds of our seabed.
This is what could make Guyanese people that go down in history as specially blessed, and of those fabled ones read about and dreamed about, but that always seem to elude most. This is what would, with absolute certainty, make ExxonMobil rise again and resume its place at the top of the oil world. The discoveries here have been breathtaking, with many more believed still to come, and one of which may just be a sleeping supergiant of an oil field. As we consider all of this, supergiant present or otherwise, it should become more obvious to Guyanese observers and citizens that Exxon needs Guyana more than Guyana needs Exxon.
To be sure, we need the company and its expertise, technology, and cash investments to explore for and exploit what is there, not only for its benefit but ours also. But we cannot be ignorant or indifferent to the unsettled and shaky position – financial position – in which the company finds itself. It is struggling to maintain payment of its rich dividend to impatient, watchful, and concerned investors. By this, we speak not of mom-and-pop investors holding a hundred shares of the company’s stock, but of the money managers, who are sharp and sophisticated regarding the company’s opportunities, possibilities, and its likelihood of reaping returns on its investments. Most of the bigger investment companies would, of routine, hold millions of shares of Exxon. So, they want results that power their yields for them to display as to their skills and competence, as well as compete with their professional peers in the investment world in what is the securities game.
Those savvy investment managers look at Exxon for returns, and when they do so, their eyes are all fixed on Guyana this new oil frontier, where so much of Exxon’s money, and its hopes, are vested. The company has placed a lot of its eggs in the Guyana basket, and it cannot fail. It is also determined not to flinch or budge from the strong contractual position that gives it an abundance of cheap oil. That cheap oil enables Exxon to keep its investors happy and quiet for the time being. But instead of looking upon Exxon’s position as a stranglehold for this country, it should be the other way around.
Production has to continue and without interruption. The company can neither risk that nor afford that, despite its prior bluster and hard-line stances. The leaders of this country have to recognize the strong hand that they hold and play hardball. Any appeal by Exxon to the courts to uphold the sanctity of its contract will take time, even with expedited hearings. But disruption will create uncertainty in the minds of its financial investors. And investors and Wall Street money function on perception, and abhor even the slightest of wrinkles in what was taken for granted, but interferes.
It is why we agree with Dr. Vincent Adams, former head of Guyana’s EPA. Guyanese leaders must call Exxon’s bluff in a hardnosed and bare-knuckled fashion. We want more for our oil. We demand more for it. We must get more for this oil of ours, and there are many ways in which this can be made to happen, spanning from possible contract renegotiation to severe cost-cutting responsibilities in a host of areas. The bottom line is this: the company is vulnerable currently. Our leaders must find the strength and will to confront Exxon, and say: it has to be this way, and no other way. Let us start over.
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