ExxonMobil can use Guyana’s oil to recover US$ Billions without Minister’s permission

Mar 12, 2023 News

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Kaieteur News – According to the 2016 Stabroek Block Production Sharing Agreement (PSA), ExxonMobil Corporation and its partners can take as much of Guyana’s oil that they may need to cover US billion worth of purchases. The sweetest part of this arrangement is that for much of its expenditure, there is no need for ministerial approval.

“Surface Rights” is part of the list of recoverable items. This covers all costs attributable to the acquisition, renewal or relinquishment of the Contract Area including the annual licence rental totalling US$1M.

Labour costs are also listed and entails gross salaries and wages. The PSA states Guyana’s oil will be used to cover the bonuses of employees for ExxonMobil affiliate, Esso Exploration and Production Guyana Limited (EEPGL), Hess Corporation and CNOOC Petroleum Guyana Limited.

Guyana’s oil will also cover holiday, vacation, sickness and disability, life insurance, hospitalization, pensions and other benefits and payments for employees of Exxon and its partners.

Also included are the reasonable travel and personal expenses of such employees including those made for travel and relocation of the expatriate employees assigned to Guyana.

Exxon and its partners can also recover any personal income tax paid for its employees.

The cost of transportation of employees, equipment, materials and supplies is also cost recoverable.

Charges for Third Party Contracts are also catered for along with all materials purchased to support the petroleum operations.

Furthermore, all rentals, taxes, levies, charges, fees, contributions and any other assessments and charges levied by the Government in connection with the Petroleum Operations and paid directly by the oil companies are recoverable.

Additionally, the contract states that insurance premium and cost incurred for insurance are recoverable.

With respect to legal expenses, the PSA states that all costs and expenses of litigation in defending or prosecuting lawsuits involving the Contract Area or any
third party claim arising out of activities under the Agreement are recoverable.

But the sweetness does not stop there for Exxon and its partners. This newspaper understands that all costs and expenses incurred in the training of Guyanese personnel are recoverable.

Guyana has also allowed Exxon and partners to recover US$ US$460,237,918. This is in respect of all costs incurred between 1999 and 2015 by Exxon and partners in the search of oil.

Additionally, the oil companies are allowed to recover all interests on loans along with all forms of financing used to fund the projects in the Stabroek Block.

There is also a provision that allows Exxon to recover all costs for the decommissioning of wells. This involves the safe removal and shutting down of operations at the end of the project.

There is also a list of items which Exxon can import without payment of duties and without need for ministerial approval. See list below.

 ANNEX D – 255 Pre-Approved and Certified Petroleum Operations Items

1. Acids (stimulation) – chemicals used downhole or injected in oil/gas formations
2. Acoustical survey equipment – including sonar, side scanning sonar, full wave form sonic loggers
3. Aeromagnetic recording survey systems
4. Air slips also known as tubing slips
5. All terrain vehicles (ATVs)
6. Automated equipment at the well head, processing plant or refinery used to monitor and control production
7. Bags (cloth) with printed tags – used in well testing
8. Bails (links)
9. Barrel – chemical mixing when used at the well head
10. Batteries – for production machinery and equipment
11. Batteries – geophysical when used exclusively for seismic prospecting in blasting and recording systems
12. Bits – drill includes PDCs, tricones
13. Blasting systems – used for seismic prospecting
14. Blowout ignition system
15. Blowout preventers (BOPs)
16. Boxes – shipping (used in well testing), core
17. Building – portable
18. Building – support – when used as weather-related protective covering for equipment such as electrical generators or instrumentation
19. Buildings – that provide office or dwelling space; geologist lab trailers; skid-mounted living trailers
20. Bulldozers – earth moving equipment
21. Cable – electrical
22. Cable – wire rope
23. Cables – electrical (integrated into machinery)
24. Cables used for seismic prospecting
25. Calibration gas – for H2S monitors and H2S analyzers
26. Casing
27. Casing accessories
28. Catwalks – see Scaffolding
29. Cement – oilwell
30. Cementing equipment
31. Centralizers – casing attachment
32. Centrifuge – used to remove fine drill solids from mud systems
33. Chemical mixing barrel – when used at the well head
34. Chemical storage drums – when used at the manufacturing or processing site
35. Chemicals used in drilling and production operations
36. Chemicals used in refining operations
37. Choke manifold and valves
38. Circulating system – includes discharge and return lines
39. Circulating systems – includes mud tanks, mud mixers, discharge and return lines and separators
40. Cleaners/degreasers – includes oilfield equipment
41. Cloth bags with printed tags – used in well testing
42. Coil tubing
43. Coil tubing reel
44. Collars-drilling
45. Comunication equipment – includes satellite communications equipment
46. Compressors – for compression of air or natural gas
47. Computers – to monitor production/drilling machinery and equipment
48. Consumables – consumable equipment used in drilling and production operations
49. Control panels – used to run generators at a well head
50. Core boxes
51. Corrosion inhibitors – added to upstream installations for preventative maintenance
52. Couplings
53. Custom software – designed for and integrated into drilling and production machinery or equipment
54. Data processing units used for seismic prospecting
55. DC electric motors (integrated) used to drive the draw works mud pumps, or top drives, also commonly called traction motors
56. Deflocculants – used in fresh water mud systems
57. Dehydration chemicals
58. Dehydrators – including mole sieve used at the well head; used during the production testing phase
59. Demulsifiers – used in production operations to remove water from crude oil
60. Density counters – spectral gamma-gamma
61. Detectors – flame, when used during the production testing phase as an alternative to a flare stack
62. Diesel power generating systems
63. Discharge and return lines
64. Dispersants – production chemicals
65. Distribution panel electrical that controls the electrical distribution for the entire rig package
66. Dope  – pipe
67. Drifts – for casing, tubing, and line pipe
68. Drill bits, includes tricone, PDCs (Polycrystalline Diamond Compact)
69. Drill collar handling equipment
70. Drill collars – used in exploration and development drilling
71. Drill line spool – wire rope
72. Drill pipe – used in exploration and development drilling
73. Drill pipe handling equipment
74. Drill stem testing equipment – includes instrumentation
75. Drilling – detergent; muds; surfactants
76. Drilling Rigs and associated equipment – Onshore and Offshore
77. Drilling fluid – chemicals used to create drilling fluid (see mud)
78. Drills – all drills used exclusively for seismic prospecting includes heli, enviro, LIS, track, truck, buggy
79. Drives – top, rotary and pump
80. Drums – for chemical storage when used at the manufacturing or processing site
81. EDR system (only an EDR and the embedded dedicated computer equipment that is integrated into the unit) used at the drilling site
82. Electric generators and alternators
83. Electric logging equipment
84. Electrical cable – distribution panel, electrical generating systems
85. Electrical distribution panel
86. Electrical generating systems (integrated)
87. Electrical submersible pumps – ESP – for artificial lift of petroleum
88. Electrical surveying equipment
89. Electrical thermostats
90. Electromagnetic surveying equipment – includes time and frequency domain induced polarization equipment
91. Emergency gas shut off devices
92. Engine oils
93. Engines – used for oilfield service
94. Equipment hoisting
95. Explosives – includes those used in seismic, coring, construction
96. Field potentiometers
97. Filter bags – for the production machinery and equipment
98. Fishing tools for retrieving tools lost downhole
99. Fittings includes those used in the transportation and distribution system, for example, on gathering lines
100. Flame detectors – when used during the production testing phase as an alternative to a flare stack
101. Flare stacks – includes mobile flare stacks used during the production testing phase
102. Flare tank systems, located at the wellsite, that are directly connected to the drilling rig and are used to control polluting emissions
103. Flare tanks and lines
104. Float equipment
105. Fluids – fracturing, stimulating, well servicing
106. Foamers – used downhole to enhance production
107. Forklifts
108. Fracturing chemicals
109. Fracturing equipment
110. Fuel gas lines – for oil and gas production machinery
111. Fuel storage tanks – see Tanks
112. Full wave form sonic loggers
113. Gamma-ray spectrometers
114. Gas – welding, acetylene, argon – when used as an inert welding gas or in repair jobs; calibration gas for H2S monitors and H2S analyzers
115. Gas dehydration equipment used in processing plants or refineries up to the point where the petroleum or natural gas is a marketable product
116. Gas detection monitors that detect hazardous gas and provide a warning
117. Gas flow equipment – when used downhole to monitor gas flow
118. Gas lift lines — located at a production wellsite to encourage the flow or transport of gas from the reservoir to the surface
119. Gas shut off devices (emergency) – that are attached to a gas line and automatically shut off gas supply
120. Gauges – engine
121. Generating systems diesel power, electrical
122. Gensets/generators – portable, mobile or standby alternators generators/gensets)
123. Geophones
124. Geophysical batteries – when used exclusively for seismic prospecting in blasting and recording systems
125. Geronimo and escape lines
126. Global positioning systems used for seismic prospecting; used for creating stakeless surveys
127. Graders
128. Gradiometers – includes potassium gradiometers for radioactive methods of geophysical prospecting
129. Gravel for well pads, processing plant on-site roads
130. Gravitational recording survey systems
131. Gravity meters
132. Grease
133. Ground penetrating radar equipment
134. Gunny sacks
135. Guns – perforating that are used during the production testing phase
136. Hammer wrenches
137. Hand held tools
138. Heat exchangers
139. Heaters – line, located at the well head to preheat gas but not line heaters on pipeline; used during the production testing phase
140. Heli-drills for seismic prospecting
141. Hoisting equipment
142. Hooks and swivels drill pipe handling equipment
143. Hydraulic tank
144. Hydraulic winches
145. Hydrogen sulfide – used for gas scrubbing
146. Hyperspectral spectrometers used for remote sensing
147. Imaging equipment – seismic
148. Incinerator – when used during the production testing phase in place of a flare stack to bum off excess natural gas
149. Indicator – weight
150. Inductive conductivity probes used for electrical or electromagnetic surveying
151. Infrared and hyperspectral spectrometers
152. Infrared spectrometers used for remote sensing
153. Inhibitors – corrosion added to upstream installations for preventative maintenance
154. Injector head that runs or retrieves the coil tubing
155. Instruments – instruments or equipment for seismic prospecting
156. Integrated diesel power generating systems
157. Integrated electrical operating systems
158. Integrated fuel tanks see Tanks
159. Integrated navigation systems used for seismic prospecting
160. Integrated pump units
161. Integrated steam heaters
162. Lab testing equipment – used for testing drilling fluids
163. Lab testing equipment – used for testing production fluids
164. Labels – for vials used in well testing
165. Laptop computers (see entry under Computers)
166. LIDAR (Light Detection and Ranging) mapping equipment used for remote sensing
167. Light towers or light plants
168. Lighting – industrial explosion proof
169. Lights
170. Lignite drilling mud or fluid
171. Line heaters – located at the well head to preheat gas, but not line heaters on the pipeline
172. Line heaters – used on pipelines, but not line heaters located at the well head for preheating gas Industry)
173. Line pipe
174. Liners used on the ground
175. Lines – catline, drill, flare, loadline, geronimo and escape, sandline, spool, tong
176. Lines – discharge, return, flare
177. Links (bales)
178. Liquefaction equipment – used in a processing plant or refinery to liquefy C02 so that it can be transported and marketed
179. Liquid viscosifiers
180. Loaders – includes loaders used to move drill pipe to and from the drilling rig
181. Logging equipment – electric wireline
182. Lubricants – specialty
183. Machinery and equipment used to inject substances into a reservoir
184. Magnetic susceptibility meters
185. Magnetometers
186. Main – drum (also known as a drill drum)
187. Main drum also known as drill drum – part of the drawworks
188. Maintenance tools includes cheater bars
189. Manifold choke, valve that is an integral piece of the high-pressure pumping system
190. Manifold – choke; mud
191. Snubbing unit – composed of a blowout preventor stack, a hydraulic jack and a power unit to run the hydraulics
192. Solids control equipment
193. Sonar includes side scanning
194. Sonic loggers – full wave form
195. Spectral gamma-gamma density counters
196. Spectrometers – infrared or hyperspectral used for remote sensing, gamma ray
197. Spools – includes drill line spool
198. Spools (specialized pieces that adapt tubing to BOPs or for spacing requirements between BOP and wellhead)
199. Stabbing guides – used in the drilling process
200. Stimulating fluids
201. Stimulation acids – chemicals used downhole or injected in oil/gas formations
202. Storage tanks – (see Tanks)
203. Submersible trash pump unit – used to pump drilling fluids, mud/water
204. Sulphur recovery equipment used in processing plants and refineries
205. Survey equipment (see Global positioning systems and Navigation systems)
206. Tank battery
207. Tanks – flare, integrated fuel, mud or water, stand-alone fuel tank fully integrated with drilling rig that serves as the direct fuel supply for the rig
208. Tanks – storage – used at a refinery or processing plant
209. Tanks – water storage
210. Telecommunication equipment
211. Thermostats electrical designed for use with any of the machinery or equipment on this list
212. Thread protectors – used in the drilling process
213. Time and frequency domain induced polarization equipment used for electrical or electromagnetic surveying
214. Tongs – backup and integral tongs, power tongs and jaws
215. Tongs – power also called rotary or casing tongs, power tongs and jaws, backup and integral tongs
216. Tools – fishing tools for retrieving tools lost downhole
217. Tools – hand
218. Top drives – Drill Rig
219. Torque gauges – used in the drilling process
220. Towers – light
221. Traction motors
222. Travelling blocks
223. Tricones – drill bits
224. Tubing – includes coil
225. Tubing slips also known as air slips
226. Two-way radios
227. Ultraviolet lamps used for remote sensing
228. Vacuum and wash pump used to clean up around rig and wash equipment
229. Vacuum tanks or systems – truck- or trailer-mounted
230. Vacuum units
231. Valve – outlet, manifold (integral part of the high-pressure pumping system)
232. Valve manifold (integral part of the high-pressure pumping system)
233. Valves – includes those used in the transportation and distribution system, for example, gathering lines
234. Valves – safety – used for well logging, drill stem testing or the production testing phase
235. Vehicles
236. Vessels – separator – used during the production testing phase
237. Vessels – supply and anchor handling for offshore petroleum operations
238. Vessels – for storage of crude oil (FPSO)
239. Vessels – Mobile Offshore Drilling Units
240. Vibrators used for seismic prospecting
241. Viscosifiers – liquid; dry polymer; concentrated
242. Walkways – see Scaffolding
243.  Waste gas transmission – see Pipes
244. Waste management bins
245. Waste water treatment units – mobile
246. Water clarifiers – used to remove residual oil in produced water prior to disposal or re-use
247. Water disposal lines – includes associated machinery and equipment that are located within the processing plant
248. Water storage tanks
249. Welding equipment and supplies
250. Well flow lines transporting raw product from a well to a satellite, battery, line pipe or processing plant
251. Well logging equipment – includes surface and downhole tools
252. Well testing equipment – includes surface and downhole tools
253. Wellhead equipment
254. Winches
255. Wireline (or slickline) unit – skid- or truck-mounted

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• Corporation, Esso Exploration and Production Guyana Limited (EEPGL), ExxonMobil, Production Sharing Agreement (PSA), Stabroek Block

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