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‘Guyana’s Stabroek Block is one in a lifetime, world class asset’ – Exxon’s Vice President
The Stabroek Block
Kaieteur News – Phillip Reitema, Vice President and Business Service Manager at ExxonMobil Guyana Limited (EMGL) has underscored the unique value of the Stabroek Block, which is located offshore Guyana.
ExxonMobil Guyana is the operator of the Stabroek Block with a 45% interest, while Hess Guyana Exploration Ltd. holds 30% interest and China National Offshore Oil Corporation (CNOOC) Petroleum Guyana Limited holds 25% interest. Guyana has emerged as one of the fastest growing economy in the world owed to the oil production offshore.
During a recent interview on Energy Perspectives, Reitema was asked about how the Stabroek Block compares to other projects within Exxon’s portfolio. “Is there any that can compare in terms of the return on investments?” he was asked.
Reitema responded by stating that Exxon has a very special opportunity here in Guyana. He said too that the Stabroek Block provides, “a unique opportunity for all of us at Exxon and in our industry to have a really special impact on the country.”
Reitema has been working in Guyana for the past two years. He explained that when he explains why he came to Guyana, he says the country is, “truly a once in a lifetime opportunity to come.”
Phillip Reitema, Vice President and Business Service Manager at ExxonMobil Guyana Limited (EMGL)
He explained that while the Stabroek Block development is unique, there are other successful projects in the oil and gas industry. However, he noted some might not have been able to ramp up production as quickly as Exxon in the Stabroek Block.
“But it’s really that combination of a world class asset, world class revenues with this development cycle that Guyana is on in this small population,” Exxon’s Vice President said.
Further, he explained that the projects in Guyana compete internationally. “They are some of the best deepwater projects in the world, we are very proud of them. I know our chairman has said something to the effect of we expect that the Guyana projects that we are doing in Stabroek will go down as one of the greatest deep-water projects in the industry’s history,” he added.
June 2024, marks 25 years since Exxon has been in Guyana. Reflecting on the company’s journey, Reitema explained that since first discovery in 2015, the company already has three projects producing oil from the Stabroek Block. He added, “Today we are producing over 600,000 barrels a day, and oil produced is revenue produced as revenue to be shared amongst the people of Guyana and our shareholder group.”
“…then we have three other projects that are being developed, Yellowtail, Uaru and Whiptail,” Reitema noted. By the end of 2027, Exxon expect to have production capacity of over 1.3 million barrels per day (bpd).
The Production Sharing Agreement (PSA) signed in 2016 between Guyana and Exxon is the subject of ongoing debates. Former Minister of Natural Resources, Raphael Trotman, during his tenure under the APNU + AFC Coalition government between 2015 and 2020, was the one who signed the deal in 2016 with Exxon. The deal Trotman signed waives all taxes from the oil companies, gives Guyana a 2% royalty on its rich resources, and agrees to the oil companies recovering 75% of investments before the remaining 25% is shared, with Guyana receiving 12.5%. The arrangement, with the lack of ring-fencing, sees Guyana paying for projects that are yet to commence production activities. Each month bills from future producing developments are added to the list of expenses to be cost-recovered by Exxon.
Additionally, the battle of the oil giants is currently unfolding between ExxonMobil Corporation and Chevron Corporation over the Stabroek Block to determine who goes down in the history books as a participant in the one of the industry’s most successful deep-water developments.
Hess Corporation has agreed to sell all of the company’s shares to Chevron, through a US$53 billion transaction. This deal gives Chevron access to the Stabroek Block. As such, ExxonMobil and CNOOC filed for arbitration since the oil giant believes it has preemptive rights, which allow shareholders access to stock before it is offered to others.
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