A newly formed company headed by a former Exxon Mobil executive was selected to support the Guyana government and Exxon to create a new independent natural gas development in the country, Guyana's Ministry of Natural Resources said.
Fulcrum LNG offered "the most comprehensive and technically sound proposal" among 17 bidders, the government said in a statement. The ministry has engaged the company along with Exxon to begin the project, with ongoing discussions in a preliminary stage, it said.
Guyana wants to put together a plan to monetize its vast untapped natural gas resources and develop a second leg to its booming energy industry. The country is estimated to have 16 trillion cubic feet of gas off its Caribbean coast, according to the U.S. Energy Information Administration.
Fulcrum LNG was founded by Jesus Bronchalo, who spent two decades at Exxon, recently as a vice president based in Guyana. Bronchalo left Exxon in the first half of 2023. Corporate records show he founded Fulcrum LNG in Nevada in July last year, acting as CEO, secretary, treasurer and director.
The government of Guyana said that Bronchalo's past "relationship with Exxon was not seen as presenting a conflict of interest, since he had severed all ties with said company."
Bronchalo did not reply to requests for comment.
Exxon has not decided whether it will participate on the project to process and export gas.
Guyana has said it would push forward the project, with or without Exxon.
As "the development of the gas resource is not an immediate priority for the company, our government decided to seek a capable independent third-party operator to either work with ExxonMobil or carry out this activity on its own," the ministry said.
Guyanese President Irfaan Ali last week said said an agreement with the government, that may or may not include Exxon, is not expected until next year.
Exxon said that as "a corporate policy, we don’t comment on commercial matters – however, we remain committed to helping Guyana develop its natural gas resources, maximizing value for all stakeholders".
Government officials said developing natural gas resources was a national priority, with the aim of exporting gas from an onshore facility to Brazil and using it to power the domestic industry or build a liquefied natural gas plant for exports.
Former Exxon Executive
During his 2020-2023 term as VP in Guyana, Bronchalo was in charge of daily relations with the government and headed the bidding process for a gas-to-energy project designed to generate electricity for industry and residents.
As Exxon's VP, he was the architect of the take-or-pay agreement in which Guyana will pay Exxon $55 million per year for the gas supply for the gas-to-energy project.
Bronchalo was also involved in the bidding process in which Exxon awarded a 20-year lease agreement to the VESHI group to build a shorebase to support the company's offshore activities.
Two of the initial partners of the shorebase were targets of a U.S. criminal investigation before the contract was awarded, Reuters revealed. The pair were sanctioned by the U.S. earlier this month.
Chinese oil giant CNOOC, one of three members of a joint venture responsible for all the country's oil production, came in second from a list of 17 groups that submitted proposals to Guyana, the ministry said.
(Reuters - Reporting by Sabrina Valle; Editing by Leslie Adler and Michael Perry)