Exclusive: Exxon in talks with Trinidad for seven deepwater blocks, sources say

Exxon Mobil is reportedly in negotiations with Trinidad and Tobago for up to seven deepwater oil and gas exploration blocks, signaling a potential return to the country after exiting in 2003. This strategic move positions Exxon near its highly prolific Stabroek block in Guyana, while aligning with Trinidad's new government's push to rejuvenate offshore investment, particularly for gas, through direct negotiations outside of its ongoing competitive bidding rounds.

Analysis

Exxon Mobil is in direct negotiations with Trinidad and Tobago's government for exploration rights to as many as seven deepwater blocks, signaling a strategic re-entry into a country it departed in 2003. The primary value of these blocks lies in their location, immediately north of the prolific Stabroek block in Guyana, where Exxon and its partners have discovered over 11 billion barrels of recoverable oil and gas. This potential expansion aligns with Trinidad's new government policy to rejuvenate offshore investment to support its domestic liquefied natural gas (LNG) and petrochemical industries, particularly after shelving a key gas project with Venezuela. The discussions are occurring outside of the current competitive bidding round, a process permitted by Trinidadian law for direct negotiation. Public statements from Trinidad's Energy Minister hinting at a major pending announcement lend credibility to the talks, suggesting the development is moving beyond speculation and could significantly expand Exxon's footprint in a proven hydrocarbon region.

Key Decisions for Investors

• Investors should view this development as a positive long-term catalyst for Exxon Mobil, representing a potentially low-cost entry into a highly prospective area that leverages its existing operational expertise from neighboring Guyana.
• The speculative nature of the talks presents a near-term monitoring requirement; a formal announcement would de-risk the asset acquisition and likely provide a positive share price impulse, while a failure could temper sentiment around Trinidad's investment climate.
• For investors with exposure across the Guyana-Suriname basin, including partners like Hess and CNOOC, this move reinforces the geological and commercial attractiveness of the entire region and could signal further consolidation and exploration activity by major international oil companies.