The Revenue Rumble
Delay-ridden oil and gas production in Guyana is threatening to reduce the country’s revenue by approximately $1 billion this year.
Power Plant Predicament
The $1.9 billion gas-to-power project in Guyana is entangled in legal disputes and potential cost escalations, as per reports from Reuters.
Untimely Task at Hand
Scheduled to be operational six months ago, the first phase of the 300-megawatt power plant is now estimated to commence full operations only by the fourth quarter of 2025.
Exxon’s Endeavor
Exxon Mobil Corporation XOM is constructing a 140-mile gas pipeline from its offshore Stabroek block to feed the onshore government project.
Optimistic Assurances
Exxon Guyana country manager Alistair Routledge affirms that their share of the project, valued at around $1 billion, will meet Guyana’s year-end expectations.
Historical Echoes
The Stabroek block, where Guyana struck its initial oil and gas bounty in 2015, currently yields approximately 645,000 barrels per day. The forthcoming power plant will harness the gas associated with the oil field, previously reinjected underground.
Read: Exxon Mobil’s LNG Expansion On Track To Double By 2030: Report
Pipeline Pause
The completion of the gas pipeline mandates Exxon to halt production on two oil extraction vessels in the third quarter to link them with the subsea pipeline.
A Calm Outlook
The executive remains unperturbed, stating, “Exxon is not apprehensive about ceasing production this year for a project that will likely not be operational until 2025.”
Also Read: Exxon’s Earnings Amidst Oil Price Challenges Has Bright Spots, Says Analyst
Investment Insights
Interested investors can venture into the stock through Energy Select Sector SPDR Fund XLE and IShares U.S. Energy ETF IYE.
Current Performance
Price Action: XOM shares show a 0.17% dip, trading at $121.17 at the last market close on Monday.
Photo: Del Henderson Jr. via Shutterstock
