Latest update March 1st, 2025 9:48 AM
Exxon has recovered US$33.9B from Guyana’s oil – Jagdeo tells Reuters
Kaieteur News- The ExxonMobil-led consortium operating offshore Guyana in the Stabroek Block has recovered a whopping US$33.9 billion by the end of January from Guyana’s oil. This is according to information related to Reuters by Vice President Bharrat Jagdeo.
EMGL President Alistair Routledge
ExxonMobil Guyana Limited (EMGL) is the operator of the Stabroek Block and holds 45% interest. The other two partners, Hess and CNOOC, hold 30% and 25% respectively.
Oil was discovered offshore Guyana in 2015 and by December 2019 oil production commenced in the Stabroek Block. In accordance with the 2016 Production Sharing Agreement that was signed by the previous APNU+AFC government with Exxon, the oil companies are allowed to recover 75% of the revenues generated from the Stabroek Block. That 75% is considered cost oil. The remaining 25% is considered profit oil, this is shared 50/50 between Guyana and the oil companies, equating to 12.5% of the operation’s profits.
“The figure explained by the Vice President includes the consortium’s spending to explore more than 30 wells at the block, and the development of six oil and gas projects approved by the government,” Reuters’ Kemol King reported.
ExxonMobil, Hess, and CNOOC have committed nearly US$55 billion to develop six government-approved projects within the Stabroek Block.
Notably, the Stabroek Block PSA lacks a ring-fencing provision. For those unfamiliar, ‘Ring-fencing’ simply means that each project would pay for itself, thereby allowing for greater profits to be split when development is paid off. Due to the lack of a ring-fencing provision, bills from future developing projects continue to be added to the list of expenses for Exxon to recover.
Vice President Bharrat Jagdeo
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 which will come on stream later this year, Uaru and Whiptail.
Exxon has already made its application to the Environmental Protection Agency (EPA) for Environmental Authorisation for a seventh project called the Hammerhead and an eight project Longtail.
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.
The eight project seeks to develop the gas resources at the Longtail site. This project carries substantial liquids and condensate, aiming to produce about 250 kbd.
(Exxon has recovered US$33.9B from Guyana’s oil – Jagdeo tells Reuters)
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Bharrat Jagdeo and the existential crisis of Rates and Taxes
Peeping Tom… Kaieteur News- I have always been perplexed by the nature of reality, the human condition, and whether... more
Why the U.S. Should Strengthen Trade Ties with the Caribbean
By Sir Ronald Sanders Kaieteur News- A rules-based international trading system has long been a foundation of global commerce,... more
Weekend Cartoon
