In two years… Exxon, partners took out $347B for depreciation and amortization, while Guyana for the same period received the exact amount in royalties, profits

Jun 08, 2023 ExxonMobil, News, Oil & Gas

…Guyana still to see audit of companies’ asset register

Kaieteur News – ExxonMobil Corporation through its subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) along with its partners in the Stabroek Block, recovered $347B for depreciation and the amortization of assets from 2021 to 2022. In the same period, Guyana made just approximately $347B in royalties and profit.

For a breakdown of the costs recovered by Exxon and its partners, Kaieteur News reviewed the financial statements for the companies which form part of court documents recently filed by EEPGL. EEPGL recovered $132.7B and $38.8B in depreciation and amortization costs for 2022 and 2021 respectively bringing the total to $171.5B in two years. Its total assets are valued at $2.3 trillion. This amount includes intangible assets, wells and facilities, Liza production assets, other assets including motor vehicles, office equipment, non-residential building and IT equipment.

With respect to intangible assets, EEPGL said this represents the acquisition costs for interests in the offshore Stabroek, Canje and Kaieteur deepwater blocks net of depreciation. As of January 2022, EEPGL said it had about $1.3B worth of vehicles, wells and facilities (work in progress) worth $733.6B, producing assets worth $265.3B, right of use for drill rigs and others totalling $203.1B. EEPGL financials were signed off by the company’s head, Alistair Routledge on May 17, 2023.

As for Hess Corporation, the partner with a 30 percent stake in the Stabroek Block said its total assets were worth $679.6B in 2021 and moved to $904.9B in 2022. In terms of depreciation, depletion and amortization, it recovered $78.8B in 2022 and $20.9B in 2021, giving a total of $99.7B in two years.

China National Offshore Oil Corporation (CNOOC) said its Guyana assets totaled $626.7B in 2021 and 841.3B in 2022 while depreciation, depletion and amortization recovered stood at $18.9B in 2021 and $57.1B in 2022. This gives a total of $76B. Exxon and partners have therefore recovered $347B for the 2021 to 2022 period. According to the 2016 Stabroek Block Production Sharing Agreement (PSA), Guyanese authorities have the right to be present, at least once annually, when inventories are being done on the companies’ assets to ensure inflated sums are not being recovered. Guyanese are notably in the dark about the company’s register as well as if authorities have utilized this inspection right in the contract.

According to the financials, EEPGL was incorporated in Bahamas on October 16, 1998. It was then registered in Guyana on June 29, 1999. ExxonMobil Global Holding Investment B.V has a 100 percent holding in EEPGL.

Hess Guyana Exploration Limited-Guyana was registered here as a branch of Hess Guyana Exploration Limited (HGEL) on October 28, 2014. HGEL is incorporated and domiciled in Cayman Islands. It is a wholly owned subsidiary of Hess Bermuda Holdings Limited which is owned by Hess Corporation, an entity incorporated in Delaware, USA.