Latest update September 28th, 2026 10:20 AM
ExxonMobil and partners walk out with US$21.6B; Guyana left with US$3B
In absence of ring-fencing from 2018-2023…
Kaieteur News – Since the startup of oil production activities in Guyana, ExxonMobil and its partners, Hess and CNOOC have walked away with a whopping US$21.6B, while the country has only seen US$3 billion in profits and royalties from its resources.
Vice President, Bharrat Jagdeo
ExxonMobil is now producing oil from three projects in the Stabroek Block- Liza One, Liza Two and Payara. The total production is expected to reach 620,000 barrels per day in the first quarter of 2024.
In keeping with the parameters of the 2016 Production Sharing Agreement (PSA), the contractor is allowed to deduct up to 75 percent of the revenues generated in the Stabroek Block monthly to recoup its investments.
The remaining 25 percent is then split between Guyana and the partners as profits. Guyana is paid an additional two percent as royalty from the contractor. This means Guyana receives a meager 14.5 percent of the earnings from the block.
It was reported that during the period 2018 to 2020, Exxon racked up some US$7.3 billion in expenses for the petroleum activities in the Stabroek Block. Meanwhile, in 2021, the company spent another US$610 million, according to its financial statement. In its 2022 Annual Report, ExxonMobil indicated that US$7.4 billion was deducted to cover its investments in the Stabroek Block. Additionally, the Bank of Guyana (BoG) in its Half Year Report also revealed that some US$4B was already recovered during the first six months of 2023.
President, ExxonMobil Guyana Limited, Alistair Routledge
This means that between 2018 and June 2023, ExxonMobil and partners recovered a whopping US$19B in costs; but that was not all it walked away with. The companies also benefitted equally from the profit sharing agreement with Guyana.
According to the Natural Resource Fund (NRF) receipts on Central Bank’s website, inflows to the oil account only amount to US$3,057,571,695.52, as at September 20, 2023. This included the two percent royalty that totals US$385,357,766.82 (2018- 2023).
It therefore means that the profit made by the oil companies from 2018 to 2023 amount to US$2,672,213,928.7.
This means that Exxon and partners walked away with approximately US$21.6B since oil production commenced in 2018 while Guyana was left with US$3 billion.
No ring-fencing
In the absence of a key provision, known in the industry as ‘ring-fencing’, ExxonMobil Guyana Limited (EMGL) has been utilizing the revenues in producing fields to pay for projects that are yet to come on stream.
For instance, Kaieteur News reported that the Stabroek Block partners in 2022 deducted millions to clean up the third and fourth oil projects that were yet to produce oil.
A ring-fencing provision would therefore prevent the company from using the resources in one field to pay for another. Notably, this key clause would enable Guyana to benefit from 50 percent of all revenues generated at one project after costs have been repaid and ensure each development pays for itself.
Guyana has been repeatedly advised by independent international experts to ring-fence its oil projects to ensure the country benefits from its resources early on, as this would help to improve the nation’s education, infrastructure and health services among others.
For instance, the Director of Financial Analysis for the Institute for Energy Economics and Financial Analysis (IEEFA), Tom Sanzillo in a report estimated that Guyana should receive upward of $6 billion annually by 2028 or sooner, however, the organization believes that due to all of the new costs, Guyana will be shortchanged until the 2030’s, if not longer.
Even though Guyana can implement a ring-fencing provision in the future Permits for the Stabroek Block projects to protect the country’s revenues, the Chief Policy maker for the sector, Vice President Bharrat Jagdeo is reluctant to move in this direction.
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