In a significant development, international oil company Chevron recently reached an agreement to acquire Hess Corporation, which holds a stake in Guyana’s Stabroek Block. Vice President Dr. Bharrat Jagdeo expressed the government’s warm reception of this acquisition, emphasizing that Chevron’s presence, coupled with ExxonMobil in Guyana, bodes well for the country’s accelerated development plan.
Dr. Jagdeo highlighted Chevron’s standing as one of the largest oil companies in the United States of America (USA). He expressed optimism that Chevron’s substantial resources make it well-suited to fund the investment program necessary for expediting production in Guyana. He specifically noted that Chevron is expected to be a “good partner” in Guyana.
The proposed sale of Hess to Chevron, as reported by Reuters, intensifies competition between Chevron, the second-largest U.S. oil and gas producer, and Exxon, positioning them as rivals in developing drilling operations in the nascent producer, Guyana. This move also underscores Chevron’s commitment to further investments in fossil fuels, reflecting the continued strength of oil demand and the efforts of major producers to replenish their inventories following years of underinvestment.
Meanwhile, Vice President Jagdeo affirmed that the country’s existing US$750 million carbon credit deal with Hess will remain unaffected by the sale of Hess Corporation to Chevron. This carbon credit agreement, Guyana’s first and only one to date, was forged after the country received special carbon credits in December of the previous year. It was established with Hess Corporation, one of the firms involved in petroleum exploration and production in Guyana’s emerging oil and gas sector.
Carbon credits, as a concept, represent tradable permits or certificates denoting the removal of a specific quantity of carbon dioxide from the environment. Given that carbon dioxide is the primary greenhouse gas detrimental to the environment, it is monitored and traded as a commodity. By the conclusion of 2030, Guyana is slated to accumulate at least US$750 million from this arrangement with Hess.
Notably, indigenous communities are set to receive a minimum of US$112 million, representing their 15% direct share as stipulated by Guyana’s Low Carbon Development Strategy (LCDS).
Drawing on expert advice, Vice President Jagdeo assured that the sale of Hess to Chevron would not impact the ongoing carbon credit agreement, ensuring its continuity.
