Exxon continues drilling offshore Guyana despite Venezuela incident

By Luc Cohen

CARACAS, Dec 26 () - Exxon Mobil Corp said on Wednesday its oil drilling and development activities offshore Guyana were unaffected by a weekend incident in which Venezuela's navy stopped two exploration vessels the company had hired.

Venezuela's navy halted seismic data collection by the boats on Saturday. The governments of each of the two South American neighboring countries said the exploration vessels were in their territorial waters.

Its 10 oil finds are at least 110 km (68 miles) away from the northwest part of the Stabroek block where the incident took place, the company said. The company has a permit from Guyana to explore the Stabroek block.

"Exploration and development drilling is continuing in the southeast area of the Stabroek Block," the company said in a statement. An Exxon spokeswoman declined to say whether the two vessels, owned by Norway'sPetroleum Geo-Services, planned to continue their survey.

Exxon shares rose about 4 percent on Wednesday as oil prices jumped, both recovering from sharp declines earlier in the week. Hess Corp, which owns 30 percent of the project, also surged 9.3 percent after plunging more than 12 percent on Monday.

Markets were closed on Tuesday for the Christmas holiday.

Venezuela's foreign ministry said in a statement on Wednesday that it had sent a formal protest to Guyana's government over its decision to allow "unilateral and arbitrary" exploration and other activities in the area without consultation.

The ministry said it had previously protested to Georgetown over a "notice to mariners" that it said was issued Dec. 6 and which it said detailed how Exxon's Guyana subsidiary would start a seismic survey in the area lasting until Dec. 31. Guyana's foreign ministry did not immediately respond to a request for comment.

A notice of the survey published on Guyana'sMaritime Administration Department's website was dated Dec. 7, and said the work was scheduled for a six-month period. Venezuela's information ministry did not immediately respond to a request for comment on the discrepancies over the dates.

In OPEC-member Venezuela, crude output is near its lowest levels in 70 years amid an economic crisis and mismanagement under military rule.

Critics say socialist President Nicolas Maduro is using the dispute over the Essequibo, a sparsely populated jungle region making up two-thirds of Guyana's land which Venezuela also claims, to distract from hyperinflation and shortages of basic goods that have prompted millions of Venezuelans to emigrate.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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