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ExxonMobil’s oil projects
Editorial
Kaieteur News- There are some facts now part of Guyana’s growing oil sector. They can be sated publicly without fear of contradiction. Taken together, they are hard to dispute.
The first fact: The Liza 1, Liza 2, and Liza 3 (Payara) oil projects have been fully paid off. The second fact: The Guyana Government, acting under the powerful hand of Vice President Jagdeo, has approved another three oil projects. That’s a total of six massive oil projects approved so far, involving outlays of billions of US dollars by ExxonMobil. The Whiptail project was the last, and is set to cost US$12.7B. The third fact: Guyana has repaid US$33.9B to ExxonMobil out of a total of US$55B invested in Guyana’s oil sector, to date. This repaid amount was shared by Jagdeo with Reuters, the well-known international news agency. The fourth fact: ExxonMobil is putting the finishing touches of a seventh oil project to be presented soon to the government for approval. ExxonMobil is expected to make its Final Investment Decision by midyear for the aptly named Hammerhead project. It may be accidental, but Hammerhead is a member of the predatory shark family. The fifth fact: even without the submission, review, and approval process for the Hammerhead oil project (number seven) completed, ExxonMobil is already talking about plans for an eight one.
We look at this short oil history of Guyana, with ExxonMobil in the leading role, and make some interpretations of what is going on here with this huge national patrimony. The first three oil projects have been paid off, and the American oil supergiant is already way ahead of Guyana with more and more oil projects lined up for approval. No sooner that several projects are in its hands, than it is ready with another set of them being readied to be raced forward with to shove before Guyana for approval. It could be an indication of the company’s great ability at forward planning, which has its place, no doubt. It is safe to say that more projects mean more barrels of daily production being set in motion, with 1.4 million barrels per day, as an intermediate target, and two million barrels daily not long after that achievement. More daily production means more handsome profits for ExxonMobil and its partners. All of this has its positives, no matter how narrow for Guyana, considering the meagerness of its percentages as provided for in the 2016 ExxonMobil-Guyana Production Sharing Agreement.
On the other hand, there is another aspect, a dirty and damaging one, to this flurry of oil projects approved for ExxonMobil, with a couple more scheduled to show up soon. More oil projects require more US billions in investment. More US billions in expenses claimed by ExxonMobil keep the 75% take from right off the top of oil revenues going at the same speed as before. As fast as projects are approved, ExxonMobil is given the opportunity to arrange its expenses to spread from one project to another and, ultimately, to a number of them. To give credit where such is due, as dubious as it may appear, Guyana’s chief oilman has done more than his share to keep this project game going at an uninterrupted clip. In the new projects game, Jagdeo has been sublime, a trusted partner with the necessary power to give ExxonMobil a valuable assist with its new oil projects schemes. He has approved four oil projects and is most likely ready with his stamp to approve oil project number seven, and whatever else is coming out of the ExxonMobil project assembly line. There is the best reason for this excitement, this zeal, from Jagdeo and ExxonMobil, working hand-in-hand.
Like infrastructure in Guyana, the budget truck keeps doling out its billions. Stopping or slowing down spending is to stop the profit bacchanal. ExxonMobil has its version: new billion-dollar projects. With no ring-fencing of oil projects, billions can be spread across projects. Guyana’s oil revenues will pay for them, so that ExxonMobil continues to profits lavishly. No ring-fencing means no stopping the flow of projects. No ring-fencing means no end to the American billions gushing to ExxonMobil. No ring-fencing means Guyana settles for paltry royalties and profits from its wealth.
(ExxonMobil’s oil projects)
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