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$8.4B for Oil Giants, $2.6B for Guyana
…as PSA profit split comes under fire
(Kaieteur News) – ExxonMobil, Hess and CNOOC raked in US$8.4 billion in profits from Guyana’s Stabroek Block in 2024, while Guyana—entitled to a 50 percent share—received just US$2.6 billion, raising renewed concerns about how profits are calculated under the Production Sharing Agreement (PSA).
While one may argue that this key detail is public knowledge- Guyana gains 50% profit after the operator deducts 75% for cost recovery- and 2% royalty from gross production, the Stabroek Block partners have been pocketing massive profits from the deal while the country which owns the resource sees paltry returns.
EMGL Business Services Manager, John Colling
Exxon, a 45% shareholder in the block reported a profit of US$4,738,784,812 for the year ending December 2024. Financial statements for Hess, the 30% shareholder, shows the company earned US$3,145,029,074 while CNOOC with the remaining 25% share bagged US$530,737,000 during the same period. This means that the partners together pocketed a massive US$8,414,550,886 for the year 2024.
Notably, Guyana should be receiving 50% of the profits from the Stabroek Block, or half of the revenue from crude sales in accordance with the provisions of the 2016 PSA. However, Guyana received just about a quarter of the US$8.4B that the Stabroek Block partners gained from the deal. Deposits into the Natural Resource Fund (NRF) in 2024 totalled just about US$2.6B raising questions about the method of calculation for profits under the contract.
During a media conference earlier this year, EMGL’s Vice President and Business Services Manager, John Colling sought to lay concerns to rest about Guyana not being paid its fair share under the agreement. In response to a question from Kaieteur News regarding the huge disparity in the figure, Colling provided an answer which fueled further speculation about the arrangement.
He said that the company’s reporting mechanism includes cost recovery, or the money the companies deducted for its investment in the block. Be that as it may, this explanation too could not solve the equation, as cost recovery for the year 2024 was over US$13B according to information in the 2024 Bank of Guyana Annual Report.
According to Colling, “The accounting under IFRS is different than accounting under the Petroleum Agreement which governs the financial activities for the block. So under the petroleum agreement costs are recovered by ExxonMobil Guyana and its partners and then profits are split 50/50. ExxonMobil Guyana, as I mentioned previously is G$700B in the red in terms of what we’ve invested versus what we have received to date so when you look at the IFRS financial statements, certainly you will see a big accounting profit but that’s really just an accounting profit.”
He continued, “In fact, a significant component of the revenues which have been achieved have gone to pay back- recovery oil. So its really that residual profit oil that’s split 50/50 with the government and as we move forward into the future, once all of those development costs have been recovered, a larger component of the revenues will be available for profit oil for splitting between ExxonMobil Guyana Limited and its partners and the government of Guyana.”
The Business Services Manager was keen to note that the overall size of the revenue will increase overtime as production grows in the Stabroek Block. Furthermore, he highlighted that revenue flow to the government has steadily increased over the years, even as the country is poised to receive US$10B annually, by the end of the decade, after costs have been recovered.
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3 thoughts on “$8.4B for Oil Giants, $2.6B for Guyana”
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Guyana has signed off on the worst deal of the century unbelievable, nobody cares as the right get RICHER and the poor poorer . Went we talk about nationalization. The socialist.communist . But we have a an example of Norway and how they development and made the necessary decision for their country. We on the other hand is in bed with the USA and they’re taking advantage with the help of the sitting government it’s not acceptable Nationalizing the oil industry is more desirable and practical 49/ 50 % EACH side
It will give all Guyanese the necessary benefits.
The oil belongs to Guyana but everyone else is making money but Guyana what a joke
Who made this deal this is a joke
I am shocked to see Guyana fell to bamboozu by the greed.
Guyaneese are not stupid people, something wrong here. I smell mongoose. Love my people.