Exxon subsidiary records $132 billion profit from Stabroek Block for 2021

Jun 16, 2022 News

Kaieteur News – ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) disclosed on Wednesday that at the end of 2021, it recorded a $132B profit after working in the Stabroek Block since 1999.

The Liza Destiny FPSO

The company noted yesterday that its revenue for the reporting period increased to $254B reflecting higher production volumes and a stronger price environment versus 2020. Importantly, the company said this was the first profitable year it recorded since working in the basin.

Kaieteur News understands that overall expenses in the Stabroek Block were up in 2021 versus 2020 mostly due to increased production costs and higher depreciation, both of which were driven by increased oil production.

This newspaper understands that lease expenses for the reporting period were primarily related to the Liza Destiny Floating, Production, Storage and Offloading (FPSO) vessel and according to ExxonMobil, were down by 15 percent versus 2020.

Furthermore, EEPGL’s share of royalty expenses related to the Stabroek Block production was $5.8B, an increase of 184 percent versus 2020.

In its Statement of Financial Position, at year-end 2021, assets totaled $1.3trillion, an increase of 30 percent versus prior year mostly reflecting substantial incremental investments in the Stabroek Block.

Also, EEPGL’s equity increased 25 percent versus year-end 2020 to $875B driven by earnings and additional equity contributions. The subsidiary said this underscores its strong financial position to meet its ongoing obligations to the government and people of Guyana.

EEPGL’s Vice President and Business Services Manager, Phillip Rietema told media operatives that the performance of the company underscores the years of investments required before pay off.

The VP said, “Our total investments to date total $1.3Trillion, and with our partners it is over $3Trillion. With the plans we have in place out to 2025 will take investments north of $6T. We continue to invest greater than the returns we receive and we will continue to do so for many years.”

To date, EEPGL and its co-venture partners, Hess Corporation and CNNOC Group, currently have four sanctioned developments on the Stabroek Block.

The Liza Phase 1 development, which began production in December 2019 utilizing the Liza Destiny floating production, storage and offloading vessel (FPSO) with a production capacity of approximately 120,000 gross barrels of oil per day, recently completed production optimization work that expanded its production capacity to more than 140,000 gross barrels of oil per day.

The Liza Phase 2 development, utilizing the Liza Unity FPSO, began production in February 2022 and is expected to reach its production capacity of approximately 220,000 gross barrels of oil per day by the third quarter.

The third development at Payara is ahead of schedule and now expected to come online in late 2023 utilizing the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.

The fourth development, Yellowtail, is expected to come online in 2025, utilizing the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day.

At least six FPSOs with a production capacity of more than 1 million gross barrels of oil per day are expected to be online on the Stabroek Block in 2027, with the potential for up to 10 FPSOs to develop gross discovered recoverable resources.