SEPTEMBER 1982 - VOLUME 3 - NUMBER 9
Texaco Ups Investment in Guatemala
Texaco, the fourth largest U.S. industrial company, hiked its stake in the Guatemalan economy recently. The company announced on July 16 that it is expanding oil exploration in northern Guatemala, even at a time when other oil investors are reconsidering the country's attractiveness.
With this move, Texaco, doubled the territory in which it is searching for oil. The company now is exploring on nearly a million acres of Guatemala land. The July agreement gives Texaco exclusive exploration rights on a 500,000 acre tract, which it shares with the Spanish and Brazilian state oil companies.
"It was of sufficient interest to us to bid on it," says Texaco spokesperson, Michael Malcolmson, adding that the company paid a $1 million signature fee required by the Guatemalan government to finalize an oil exploration contract.
Texaco is no newcomer to Guatemala. In November, 1978, Texaco and Amoco (Standard Oil of Indiana) obtained the exploration rights on a 487,000 block in the Peten region. As operator, Texaco drilled four wells, two of which yielded oil, one at a rate of 2,300 barrels per day. Texaco, however, has yet to bring either well into commercial production, and has ceased operating while it is "assessing the results," says Malcolmson. The company also owns an oil refinery in Guatemala that produces 16,000 barrels a day.
Unlike Texaco, Basic Resources International announced August 18 that it plans to liquidate its interest in Guatemala's oil industry. The Luxembourg conglomerate pioneered oil investments in Guatemala in the mid-1950's, and struck the first commercially exploitable well in 1977. The company refused to comment on its reasons for leaving. Its 1981 budget for exploration stood at $75 million.
Getty Oil also has pulled out, informing the Guatemalan government on May 15 that it would be relinquishing claims on the half-million acre tract the company had been exploring. Getty drilled five wells and found no oil. "A dry hole is a dry hole," says Frank Parisi, Getty spokesperson. "If you show no oil after drilling your five best prospects, there's certainly no incentive to stay."