The competition is heating up between US oil companies as they all try to get a piece of Guyana’s oil pie. 

Recently, the United States’s second-largest oil company, Chevron, announced that it is acquiring oil and gas exploration company Hess, for US$53 billion.

Hess is one of three companies drilling and exploring for oil in Guyana.

Guyana has made 46 oil discoveries since 2015, for a total of over 11 billion barrels of recoverable oil and gas, mostly in the Stabroek bloc.

Exxon Mobil, which is the largest oil company in the US, has the largest stake in the exploration project – 45%. China’s CNOOC has a 25% stake and Hess has a 30% interest.

With the Chevron-Hess deal, Chevron will acquire Hess’s stake in the project and become more directly involved in Guyana’s oil industry. 

According to an article from the Associated Press, Guyana is set to become the world’s fourth-largest offshore oil producer. That would place it ahead of countries like Qatar, the United States, Mexico and Norway.

Our Taking Stock analyst, Julian Morrison explained just how important Guyana is on the global stage.

“The US has strategic petroleum reserves and over the last three years, those strategic petroleum reserves have fallen off significantly. So to colour the discussion, the fall off in the reserves means that the US cannot continue to supply itself and the rest of the world with only US supply. That would spur the largest energy producers in the world which are US oil companies to look into new places which is how Guyana comes into the discussion,” he explained.

So of course Chevron would want in on the fun. Plus keep in mind that just because  Exxon has the largest interest in the exploration, it doesn’t automatically give them the rights for production, which is where the big money comes in.

So with this deal, Chevron and Exxon are setting up for fierce competition when it comes to production. 

And all of this is happening as Guyana just made another “significant” oil and gas discovery. The Government hasn’t said how many barrels of oil were discovered yet, but in any case, these latest updates are a win for Guyana and the country’s economy…

And that’s the bottom line.