US investment bank believes oil development plans in Guyana remain intact

By Anara Khan

 

DPI, Guyana, Saturday, May 25, 2019

Despite the political uncertainty in Guyana, pending the outcome of the Caribbean Court of Justice’s (CCJ’s) ruling, US multinational investment bank, Morgan Stanley, believes that oil development plans remain intact.

According to an article by OilNOW online news, Morgan Stanley stated that regardless of the CCJ decision and the outcome of the next elections, it does not see near-term risk to the production sharing contact, since both political parties have stated support for the existing contract with co-venturers ExxonMobil, Hess and CNOOC.

In addition, OilNOW quoted the bank as saying that it sees “only limited risk in Guyana and significant potential upside.”

Tuesday last, oil suffered its worst day on the stock market for 2019 resulting in a number of companies including Hess Corporation, which has a 30 per cent interest in Guyana’s Stabroek Block, taking a hit. Hess shares declined by 8 per cent on that day.

The article by OilNOW reported that the investment bank attributed the drop to the combination of “falling oil prices and political uncertainty in Guyana.”

The bank said two recent developments in the country have been in focus in its recent dialogue with investors and were topical in a meeting held on Tuesday, May 23, with Jay Wilson, VP of Investor Relations at Hess Corporation. These are; the potential for new elections and rumors of anti-corruption investigations.

It was noted that investors have been concerned that political uncertainty may result in the government changing the production sharing contract terms or delaying approval of additional development.

Morgan Stanley said the message from Hess was clear: “the Stabroek exploration license was fairly and transparently awarded” to ExxonMobil.

(Source: OilNOW)

 

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