Latest update February 9th, 2026 12:35 AM
Guyana may never receive full 50% profit from Exxon deal – Jordan
…cites ramped up production, lower oil prices
(Kaieteur News) – As Guyana increases oil production at the projects currently in operation, it may be shortchanging itself from ever enjoying the promised 50% profits from the Stabroek Block.
Under the 2016 Production Sharing Agreement (PSA), Guyana receives 12.5% of profits. ExxonMobil is allowed to take 75% of the oil produced every month to cover its expenses and also enjoys a 12.5% profit share. In addition to its 12.5% profits, Guyana also receives 2% of gross production as royalty.
Notably, after the contractor recovers all of its expenses to develop the resources, Guyana would be eligible for 50% of all production, minus operating expenses from the projects.
Former Minister of Finance, Winston Jordan
With more and more developments being approved however in the absence of ring-fencing, the country has been receiving meager profits, delayed to facilitate cost recovery.
In an environment of high oil prices, calls persisted for the government to ring-fence as this would have allowed the country to benefit from at least US$8B alone from Liza One and Liza Two to date. Ring-fencing would pave the way for the country to receive 50% profits after paying off the development costs.
Sharing his view on the subject, the former Finance Minister, Winston Jordan said half and half profit split for Guyana may just be an illusion.
He raised concerns not only about the rapid depletion of the country’s reserves, but the fiscal implications this could have on the nation’s development agenda.
Jordan during a live broadcast said, “Now we have come to the stage where there is growing concern as to the depletion of our reserves and it looks rather concerning that this depletion of the reserves will be taking place in the context of declining oil prices.”
The recent move by United States President, Donald Trump to abduct the Venezuelan President, Nicolas Maduro and take control of the country’s oil resources is likely to cause prices to decline further to US$50 per barrel.
To this end, the former minister explained, “If Trump has his way of a $50 top price for oil, and at a time when production in Guyana will be ramped up to one million plus, it means that we will be in a very desperate situation and all the talk that brother Jagdeo has been telling us that we front loading and we back loading and all kinds of things will go to nought. Why? Because we will be producing more oil at a reduced price which means that we will never achieve or achieving that situation where we will be getting a higher profit share will be illusionary.”
“It will be fading from us, because it will require more and more oil at a lesser and lesser price for Exxon to recover its investment and what is worse, while more and more oil is being dug out the ground, requiring those lifespan of those wells to be considerably shortened, we will be getting less and less money being placed into the Natural Resource Fund with deleterious effects on quantitative growth- that’s the building of all these roads and buildings and D&I (draining and irrigation),” Jordan added.
Currently, Guyana is producing an average 900,000 barrels per day (bpd) from four deepwater projects. All of the projects have been optimized to increase productive capacity.
Last week this newspaper reported that blistering extraction rates in the Stabroek Block led by ExxonMobil have slashed the projected lifespan of Liza One and the Liza Two developments. What should have been a 20-year project life for each development has been reduced in half as the oil remaining will only last for another three years’ time.
Discover more from Kaieteur News
Subscribe to get the latest posts sent to your email.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Sir. Ronald Sanders
The GHK Lall Column
Weekend Cartoon
