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Guyana received US$5.4B in royalty, profits from 500M barrels pumped to date
Guyana received US$5.4B
FPSO Prosperity (Guyana received US$5.4B)
By Renay Sambach
Kaieteur news-ExxonMobil Guyana Limited (EMGL), the operator of the Stabroek Block, recently announced that it has achieved the milestone of producing 500 million barrels of oil from the block since production began in December 2019.
In a statement on Wednesday the company said, “Oil production will generate tens of billions of dollars of revenue and significant economic development for Guyana.”
According to Exxon, since first production in December 2019, more than US$5.4 billion in oil revenues and royalties have been paid into the Guyana Natural Resource Fund (NRF).
The Stabroek Block is estimated to hold some 11.6 billion barrels of oil equivalent. The U. S oil giant holds 45% interest in the block, while its partners Hess Guyana Exploration Ltd. and CNOOC Petroleum Guyana Limited hold 30% and 25% respectively.
The 2016 Production Sharing Agreement (PSA) outlines the distribution of revenues generated from the Stabroek Block between the oil companies and Guyana. The deal allows Exxon and its co-venturers to recover up to 75% of production costs before the remaining 25% is shared between Guyana and the Stabroek Block partners. After accounting for the 2% royalty, cost recovery, and profit sharing, Guyana’s total take from the oil produced is 14.5% of the total value of the oil.
The Stabroek Block
According to information from the Bank of Guyana (BoG) and government reports, at the end of 2023 Exxon and its partners recovered over US$18.4 billion. Cost recovery for the Stabroek Block has shown a steady increase over the years, rising from US$633 million in 2020 to US$1.9 billion in 2021, US$7.4 billion in 2022, and US$8.3 billion in 2023. In the government’s 2024 Mid-Year report, it was revealed that US$7.5 billion was recovered by the oil companies. This will take the total revenues recovered by Exxon and its partners to about US$25.9 billion.
Notably, ExxonMobil, Hess, and CNOOC have committed nearly US$55 billion to develop six government-approved projects within the Stabroek Block. The first three projects – Liza Phase 1, Liza Phase 2 and Payara are averaging more than 650,000 barrels of oil per day (bpd) in production. The ExxonMobil-led consortium has plans in place to grow production capacity to more than 1.3 million bpd by the end of 2027, when they anticipate having all six projects up and running offshore. This will include the addition of the Yellowtail, Uaru and Whiptail projects.
Moreover, Exxon has already made an application to the Environmental Protection Agency (EPA) for Environmental Authorisation for a seventh project called the Hammerhead.
Hammerhead was announced as Exxon’s ninth commercial discovery in August 2018. The Hammerhead-1 well was drilled in a new reservoir, encountering approximately 197 feet (60 meters) of high-quality, oil-bearing sandstone reservoir. The well was safely drilled to 13,862 feet (4,225 meters) depth in 3,773 feet (1,150 meters) of water. The project will target between 120-180 thousand barrels per day (kbd). Exxon is aiming to commence production activities by 2029, following the requisite approvals.
The daily production capacity being targeted for Hammerhead, is significantly lower compared to the last three projects sanctioned, which each target over 200 kbd. Hammerhead-1 is located approximately 13 miles (21 kilometers) southwest of the Liza-1 well and follows previous discoveries on the Stabroek Block at Liza, Liza Deep, Payara, Snoek, Turbot, Ranger, Pacora and Longtail.
Notably, while Exxon is hoping to get approval for the Hammerhead project by mid-2025, Vice President (VP) Bharrat Jagdeo has said that he had discontinued an advertisement initiated by the Ministry of Natural Resources seeking a consultant to review ExxonMobil’s Field Development Plan (FDP) for the Hammerhead development. He said he made this decision because the information the company presented thus far is incomplete. Meanwhile, the EPA has advanced its part in relation to the application that was made by EMGL for Environmental Authorisation for its seventh project. On November 6, EPA published the Terms and Scope to guide the preparation of the Environmental Impact Assessment (EIA) for the Hammerhead Development.
(Guyana received US$5.4B in royalty, profits from 500M barrels pumped to date)
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