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Exxon’s Guyana operations secure with US$40 per barrel breakeven point – Phillip Rietema, Vice President of EMGL
Kaieteur News – In a recent episode of the Energy Perspectives Podcast, Phillip Rietema, Vice President and Business Service Manager at ExxonMobil Guyana Limited (EMGL), discussed the company’s strategies to maintain a competitive edge amid volatile oil prices.
Phillip Rietema, Vice President and Business Service Manager at ExxonMobil Guyana Limited (EMGL)
Rietema underscored the importance of efficiency and cost management in their deepwater projects in Guyana, highlighting the significance of achieving a low breakeven price for oil.
During the podcast, Rietema was asked about the breakeven spread for Exxon’s Stabroek Block projects which are currently producing over 640,000 barrels per day (bdp).
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.
Considering the fluctuating oil prices in recent years, ranging from as high as US$100 to as low as US$80 per barrel, Rietema acknowledged the inherent volatility of the oil market and the challenges it poses.
“So in our industry, we talk a lot about the costs of supply for projects,” Rietema stated.
He explained that the oil and gas industry is a very volatile market which results in limited control over revenues by oil companies. As such, he noted that Exxon focus on being as efficient as possible and having the lowest costs.
Rietema elaborated on the concept of breakeven, which refers to the average oil price required to pay back the investment and achieve a return. He stated that ExxonMobil aims to have the lowest cost projects, positioning them advantageously on the cost of supply curve.
“The projects here in Guyana, they compete internationally, they are some of the best deepwater projects in the world,” Rietema noted.
Addressing the price fluctuations, Rietema pointed out that these projects are designed to withstand market volatility.
He added, “You noted it went from US$100 to US$80. In 2020, it was down to US$40. So these projects, they all have costs of supply under $40 a barrel…as a team look to optimize the projects we try and drive that down as low as possible. Again, every dollar counts, every dollar matters.”
Moreover, he explained that the company’s aim is to imbue a value focus that every dollar matters.
“Every week, we get together as a leadership team and we talk about the value that we create and we have something called value spotlights where we spotlight even saving of a few dollars but it’s really to drive a culture where everyone takes responsibility within the organization for value and looks for opportunities to increase value, we say every dollar counts,” Rietema said.
- barrel, breakeven, Phillip Reitema, prices, Vice President and Business Service Manager at ExxonMobil Guyana Limited (EMGL), volatile
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