Dispute Over Guyana Oil Field Rights Could Impact Global Energy Market
During the first half of 2025, oil news focused on three major topics. Those topics are:
- The impact of tariffs.
- The possibility of a nuclear deal with Iran that would allow their oil to flow more “freely” in global markets.
- OPEC+ increasing overall production.
Another Major Topic in Oil News – Legal Battle Over Energy Rights
However, there is another major topic in oil news. There is a legal battle taking place over one of the largest oil and natural gas finds in the Western Hemisphere. This battle is between two longtime oil giants – Chevron and Exxon – regarding who has rights to this lucrative energy find.
Some Background
A recent Oilprice.com article provides some needed context for this dispute. Chevron purchased Hess Corp in 2023. That purchase included a 30% stake in Guyana’s offshore oil field. However, this stake in the offshore oil field is being challenged by the other two partners, Exxon and CNOOC of China. Their view is that prior contract language provides these two partners a right of first refusal, and they state that the contract does not apply in the case of a corporate merger.
Extreme Stakes
This type of dispute can arise in any situation, but the stakes in Guyana are extreme. Exxon claims that Guyana is the third largest per-capita oil producer in the world and daily production of oil is set to reach 1.3 million bbls/day by 2030. Overall reserves in Guyana’s offshore area are estimated at 11 billion barrels. For more on the energy wealth within Guyana, check out these Twin Feathers blog posts from our South America series: Guyana – A Developing Energy Market – Part 1 and Part 2.
This legal battle moved into an arbitration hearing over the last week of May. Any ruling from the court will not stop the overall production within Guyana. It will only impact who has rights and value from that production.
Why is This Important?
If Guyana’s production is not threatened, why is this dispute important? Looking back several decades, Venezuela was the golden child of oil production in South America. Political missteps and sanctions have now slowed that country’s production to a crawl. At this moment, Guyana has the opportunity to emerge as the next big South American oil producer for future decades.
Within the LPG industry, this whole situation has great significance because of the NGL stream coming from both oil and natural gas. South America, along with Central American and the Caribbean, have been avid purchasers of U.S. LPG. In fact, recent announcements have touted two new independent LPG import terminals being built in northern Brazil, with start dates in 2028. This seems to support more U.S. LPG heading south.
Conclusion
But the advent of new LPG production within Guyana will provide another supply source and price competition for much of that region. The outcome of the legal battle between Exxon and Chevron won’t slow production, but it could change who has rights to what product. And that may end up being the bigger issue to watch in the coming months and years.
Current Events – June 2025
By JD Buss
