Govt. still has no say in US$1B oil clean up fund

Jun 12, 2026 News

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…as money sits in ExxonMobil and partners’ hands

(Kaieteur News) – To date, ExxonMobil and its Co-Venturers, Hess Guyana Exploration Limited and CNOOC Petroleum Guyana Limited has deducted close to US$1B for the purpose of decommissioning or cleaning up the ocean floor after the life of oil and gas projects in the Stabroek Block come to an end.

This week, ExxonMobil Guyana Limited (EMGL), the operator of the block published its financials for the year ended December 31, 2025. According to the document seen by this newspaper, Exxon has so far taken out GY$103B. Meanwhile, Hess took another G$90B and CNOOC some G$197.6M.

Overall, the companies’ financials indicate that Guyana has already paid $193B or US$965M for decommissioning since production activities started in 2019.

The entire sum which nears US$1B is held and controlled by the oil companies, although government revealed plans since January 2025 for the fund to be controlled jointly by Guyana.

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.

Decommissioning involves the safe plugging of wells, detaching of subsea umbilicals, risers, and flowlines (SURF) and removal of the Floating Production Storage and Offloading vessel (FPSO).

Paying for cleanup projects still to startup

Financials by the partners have revealed that the oil companies are not just shortening Guyana’s profits to pay for an expense that is required years into the future on projects currently producing but is also deducting revenue to cleanup projects that are still to startup.

According to CNOOC’s 2025 financials, “During the period ended December 31, 2025, additions to the decommissioning and restoration provisions include the cost for two new development wells in Liza Phase 2, four new development wells in Payara, four new development wells in Yellowtail, and 16 new development wells in Uaru and 11 new development wells in Whiptail.”

Uaru, the fifth project and Whiptail, the sixth development has not yet commenced oil production.

Government previously said that the companies were not allowed to shorten the country’s profits by taking out decommissioning monies for projects yet to startup. Vice President, Bharrat Jagdeo explained, “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.”

Stakeholders have often raised concerns about oil giants control over the decommissioning fund, as countries in the past have been left to foot the bill after these companies walk away from the jurisdictions.

‘Secure cleanup costs’

In fact, the Commonwealth Secretariat previously urged its member countries to secure its decommissioning monies to avoid taxpayers having to foot the bill.

In a practical guide published by the Secretariat called, “Oil and Gas Decommissioning Toolkit,” the body stated that given the uncertainty of decommissioning cost, “it is critical that there are mechanisms in place to ensure that there are sufficient funds available to carry out the decommissioning activities.”

It was highlighted too that in the instance of an oil company failing to clean-up the ocean’s floor, “If such a situation arises, governments will likely have to undertake and pay for decommissioning, because it is in the public interest and/or because it is required to meet the country’s international obligations.”

In this regard, the Secretariat urged governments to secure financial assurance and implement appropriate assurance mechanisms to avoid taxpayers having to foot the bill for decommissioning costs.

Still no changes

Be that as it may, Exxon confirmed this week that the oil companies still control Guyana’s cleanup fund.

Vice President and Business services Manager, John Colling in response to a question from Kaieteur News said, “As you’re aware there’s been legislation passed regarding the setting up of the decommissioning fund. Talks are underway between ExxonMobil Guyana Limited as well as the government on what the terms and conditions of that fund might look like.”

Colling said he was unable to say when the discussions with the State would conclude. In the meantime, he told reporters, “What we are looking for is a fund that is consistent with the Petroleum Act as well as international best practices that ultimately provides the financial assurance required by the government of Guyana and is also in industry best practice to encourage future investors to continue to do business here in Guyana. And so, we think both of those objectives can be achieved through the ultimate finalisation of terms and conditions of that fund.”

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• cleanup costs, cleanup money taken out by, ExxonMobil, oil companies

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