Latest update July 30th, 2026 1:03 AM
Latest News
- Canadian firm pockets US$2.2B on Guyana gold field, country gets nothing
- ‘Indigenous people have suffered under ‘broken’ transport system for decades’ – APA’s Executive Director
- Protests spread to Den Amstel, Melanie over arrest of MV Barima crew members
- Opposition mobilises lawyers, warns families against signing compensation documents in MV Barima tragedy
- Taxi driver killed after truck collides with car at Goedverwagting
ExxonMobil still in control of over $70B in cleanup costs
(Kaieteur News) – Decommissioning monies, or cleanup costs as commonly referred to, are currently being withdrawn by ExxonMobil Guyana Limited (EMGL) although the sum will not be required until production comes to a halt in the Stabroek Block.
President, ExxonMobil Guyana Limited, Alistair Routledge
In the oil and gas industry, decommissioning refers to the process of safely dismantling and disposing of offshore and onshore oil and gas facilities once they reach the end of their productive life. This involves cleaning up the site, removing equipment, plugging wells to prevent leaks, and restoring the environment as closely as possible to its original state.
Decommissioning is also a costly exercise, sometimes demanding billions of US dollars hence countries are often advised to mandate that oil companies set aside money in a fund for this purpose. This fund ensures that the country is not left to carry the burden of handling those costs which ought to be covered by the oil companies.
To date, over $70B has been drawn out of Guyana’s oil towards decommissioning by Exxon. Earlier this year, the country’s chief policymaker on petroleum, Vice President Bharrat Jagdeo revealed that efforts are being made to allow Guyana to have joint control of the decommissioning account to allow for greater transparency and accountability of the fund.
Currently, Exxon still holds the key to fund as government is still working towards this objective. This is according to Natural Resources Minister, Vickram Bharrat.
Natural Resources Minister, Vickram Bharrat
In an exclusive interview at the sidelines of an event last week, the Minister told Kaieteur News, “We have a consultant that is working on that right now for us; the same consultant that has been working with us all the time, S&P Global. They are working with us on putting that together so we’ll have more information once we get that.”
He declined to answer further questions as he shuffled off to another event.
In its 2024 Annual Report, EMGL, the operator of the Stabroek Block reported that it has already drawn about $70.4B for decommissioning to date. Notably, Exxon’s co-venturers also enjoy the privilege of taking and controlling clean up monies.
For instance, 2023 financials seen by this newspaper indicates that ExxonMobil billed Guyana $10,857,314,009, while Hess also added $13,072,707,068 and CNOOC $11,393,140,000 for decommissioning. In total, the companies charged the country $35,323,161,077 or US$176,615,805 for decommissioning in 2023. Notably, CNOOC’s financials at the time also revealed that the companies deducted monies for a project that had not yet commenced production activities.
When asked to address this state of affairs during his weekly press conference, Vice President, Bharrat Jagdeo refused to comment, since according to him, “I think it is not accurate.” He however pointed out, “but if the project hasn’t started as yet, my assumption is that you can’t deduct from it for decommissioning if it hasn’t even been commissioned as yet.”
Jagdeo was clear that oil companies should not be deducting costs to decommission a project if it has not yet been commissioned. At his weekly press conference earlier this year, the VP noted that the new Petroleum Activities Act requires decommissioning costs to be held in a joint account. “We passed a new Act, and the act now says, if you have the decommissioning cost, you have to keep it in an account held jointly between the government and the oil and gas companies,” Jagdeo explained,
He said he is hopeful that all of the monies the company had been holding for decommissioning for the current producing projects will be added to the account. “But from the previous project, we’re hoping, over time now, that the law is there, that the next talk we’ll have to have with Exxon… over time, that will happen,” the VP added.
In November 2024, Minister, Vickram Bharrat confirmed that ExxonMobil will now be required to follow a series of robust decommissioning rules as outlined in the nation’s Petroleum Activities Law. While the new rules only came into effect in August 2024, the minister said they shall apply to all of Exxon’s projects in the Stabroek Block, including those passed prior to the enactment of the legislation.
Share this:
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
Blunt of the day
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
