ExxonMobil find… Guyana to get percentage of every barrel of oil sold

Aug 06, 2015 News

Details are emerging over the agreement that Guyana has with US-owned ExxonMobil.

On every barrel of oil that is sold when pumping begins, Guyana will be receiving a percentage of the sales. That is part of the production-sharing agreement that Guyana has entered into with the company.

In May, the US exploration company announced that it has found significant evidence of oil in the Stabroek Block, where the Deepwater Champion ship had drilled a well.

While benefits are not expected within five years, the time it takes to build the necessary infrastructure, Guyana and ExxonMobil are moving ahead with plans to move into production mode.

Yesterday, Minister of Governance, Raphael Trotman, disclosed that there are other agreements that Guyana can capitalize on while an oil well is in production. These include sharing in the profits. However, the best agreement would remain one involving receiving proceeds from every barrel of oil sold. It is more stable.

Guyana has been seeking overseas help to help develop the oil and gas industry – virtually uncharted territory.

In addition to the US, Government has been talking to Trinidad and Tobago. As a matter of fact, last week, Trotman says, President David Granger was in the twin-island Republic where he broached the subject with Prime Minister Kamla Persad-Bissessar.

Among some of the areas discussed is collaboration in energy, oil and gas, the supply of fuel and alternative energy like wind and solar.

With Trinidad’s years of experience in the oil industry, Guyana would be looking to tap into the expertise from there.

Guyana has even been looking at environmental practices, using worse case scenarios such as those from areas including Louisiana, US, where a major oil spill caused considerable harm to the Gulf a few years ago. In Miami, the Coast Guard, as maritime’s first responders, have been lending Guyana valuable advice. There is even help from Curaçao.

Guyana had entered an agreement with ExxonMobil in 1999 but started seismic planning in 2008. It mobilized its drilling rig, the Deepwater Champion, in February, drilling almost 1,800 metres.

The announcement of the oil find by ExxonMobil had sparked a diplomatic war or words between Guyana and Venezuela. The latter is claiming Essequibo and a large part of Guyana’s waters, including where oil is found, as theirs.

The Deepwater Champion recently left the drill site as ExxonMobil plans its next move to tap into the reserves it found.

Two other attempts to find oil offshore Guyana- by CGX Energy and Repsol- were unsuccessful.

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ExxonMobil find… Guyana to get percentage of every barrel of oil sold

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