Latest update February 11th, 2025 2:15 PM
Latest News
- Govt. makes move to cancel CGX, Frontera Corentyne block license in 30 days
- ExxonMobil paying taxes in Bahamas but not a cent to Guyana
- Canadian company completes airstrip, roads to kick off 5.4M ounce gold project in Guyana
- Hamas threatens to postpone next hostage release, claiming Israel has broken terms of ceasefire deal
- Twelve-year-old girl missing for three weeks
Exxon recovers US$19B out of US$29B spent on Stabroek Block
Kaieteur News – Head of ExxonMobil Guyana Limited, Alistair Routledge revealed yesterday that his company spent US$29Billion on the Stabroek Block thus far. Out of that sum, he noted that US$19B has been recovered.
During a press conference at his company’s Kingstown office, Routledge noted that these accelerated investments are all possible because of the lack of ring-fencing in the Stabroek Block.
Ring-fencing in the oil and gas sector, means that profits from one project must cover the expenses for that initiative. In the absence of such a provision, a company is allowed to use profits from one project to cover the costs of another.
Routledge reasoned that the absence of ring-fencing benefits the companies involved as well as the country. He essentially noted that having one large block of multiple projects where there is also one cost bank allows for oil output to increase at a faster rate, thereby generating more revenues for the country and the companies in the long run.
If ring-fencing is in place, he noted that Guyana would be at risk of finding itself with stranded assets that are awaiting a separate financing stream. Routledge assured that Guyana is not suffering any value leakage in the absence of this provision, even though local, regional and international stakeholders argue otherwise.
With respect to the recovery of expenses for the Stabroek Block, Routledge reminded that the contract allows for 75 percent to be recouped from revenues in a given month. He noted, however, that this will reduce as Guyana heads into the 2026/2027 oil production period.
He said, “So there are two factors which influence the speed of cost recovery which is the production; as that continues to increase then we are generating more revenue (to cover investments made) and then there is the oil price which you can never know.
“So there is a degree of uncertainty on the second but in a reasonable range of oil prices, even as early as 2026/027 we won’t need the full 75 percent of that limit.”
Routledge recalled that Vice President, Dr. Bharrat Jagdeo had also noted the importance of the 2026/2027 timeline as being the period when Guyana will generate more than enough oil revenues to clear it debt.
Routledge also noted that Exxon has an open book policy with the Ministry of Finance so that it can see the company’s production streams and timeline for other projects and can forecast accordingly.
In conclusion, the Exxon official said his company is here for the long term and is committed to doing what is in the nation’s best interests. He said plans remain on track for Guyana to produce over 1.2 million barrels of oil per day from the Stabroek Block by 2027.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Are we better off today than we were before first oil?
Peeping Tom… Kaieteur News-If you had asked me ten years ago what I wanted for Guyana, I would have said a few things:... more
OAS Secretary General Election and renewed OAS Consensus
Antiguan Barbudan Ambassador to the United States, Sir Ronald Sanders By Sir Ronald Sanders Kaieteur News- The upcoming election... more
Weekend Cartoon
