Guyana has ended the Frontera-CGX joint venture, canceling its license for the Corentyne block. This reinforces Exxon’s dominance in the region, particularly as they advance major projects like Longtail, which will significantly boost their production. Oil price fluctuations challenge smaller competitors while Exxon remains strong due to its extensive resources and ongoing developments.
Guyana’s government has terminated the Frontera-CGX joint venture by canceling its oil prospecting license for the Corentyne block. This decision follows a warning issued back in February, indicating a lack of confidence in the JV’s viability within Guyana’s oil sector, which is dominated by ExxonMobil.
The Corentyne block was considered a crucial opportunity for diversification in Guyana’s oil market, which relies heavily on ExxonMobil’s Stabroek Block, known to contain over 11 billion barrels of oil equivalent. With the Frontera-CGX partnership now ended, Exxon has further solidified its control over this lucrative offshore area.
As Exxon, along with partners Hess and CNOOC, progresses with their Guyana initiatives, they are launching projects like Longtail. This major development aims to produce 1.5 billion cubic feet of gas per day and 290,000 barrels per day of condensate. It involves multiple discoveries and is poised to be Exxon’s eighth project in Guyana.
Exxon’s production from existing operations exceeds 650,000 barrels per day, positioning them to rival OPEC member outputs soon. In contrast, the market faces instability with WTI oil prices at approximately $67 and Brent fluctuating around $70, making it challenging for lesser competitors like Frontera and CGX.
The current landscape suggests that to engage in drilling activities in Guyana, companies need substantial financial resources and long-term strategic vision, particularly to compete with Exxon’s dominant position.
The cancellation of the Frontera-CGX joint venture highlights the tightening grip of ExxonMobil over Guyana’s oil sector. As the supermajor advances with extensive projects like Longtail, smaller players struggle against the financial and operational scale of such dominance. With oil price challenges persisting, the competitive landscape favors those with ample resources and patience to sustain operations in this increasingly lucrative region.
Original Source: oilprice.com
