US$30B went into cost bank, Exxon recovered US$20B as of last year – company’s VP

…says Govt profits will grow rapidly in “not-too-distant future”

As allowed under the 2016 Production Sharing Agreement (PSA), ExxonMobil Guyana has recovered US$20 billion in its investments from the Stabroek Block as of 2023.
This is according to the company’s Vice President and Business Services Manager, Phillip Rietema.
From the time ExxonMobil began exploring for oil in Guyana, it has invested a total of US$15 billion or G$3 trillion into the Stabroek Block. Rietema explained during an engagement with the media on Thursday that the company has recovered US$20 billion or G$4.1 trillion to date.
“Through the end of 2023, the total investment in cost, put into the cost bank, was around US$30 billion. And we have recovered around US$20 billion. We’ll continue to provide updates with that, over time.

“But what it shows is that we continue to invest more than we’re receiving from the Block. We continue to reinvest and it will still take some time before we recover those investments,” Rietema further explained.
Rietema went on to assure that in the near future, Guyana’s profit share and the company’s would grow as more of Exxon’s investments made into the Stabroek Block are recovered under cost recovery.
“What I point out is, when the investments have been totally recovered in the future, then the amount of profit available to share between the contractor group and the Government will grow and grow considerably. And we can see that day coming in the not-too-distant future,” the executive further said.
Exxon, through its local subsidiary Esso Exploration and Production Guyana Limited (EEPGL), is the operator of the Stabroek Block and holds 45 per cent interest in the Block. Hess Guyana Exploration Ltd holds 30 per cent interest, and CNOOC Petroleum Guyana Limited, a wholly-owned subsidiary of CNOOC Limited, holds the remaining 25 per cent interest.
The Liza Phase One, Liza Phase Two and Payara projects, which are producing overall more than 600,000 barrels of oil per day, account for the three floating Production, Storage and Offloading (FPSO) vessels operating in Guyana’s offshore Stabroek Block.
ExxonMobil has been present in Guyana since 1999 and initiated exploration activities in 2008. According to the provisions of the 2016 Production Sharing Agreement (PSA) signed under the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, 75 per cent of gross revenue goes to cost oil while Guyana gets a total of 14.5 per cent from the remaining revenue and royalty and Exxon gets 10.5 per cent.
Under the new conditions of the model PSA that the People’s Progressive Party/Civic (PPP/C) Government has implemented, the cost recovery ceiling has been lowered from 75 per cent to 65 per cent.
This is in addition to including terms for all future PSAs to feature the retention of the 50-50 profit-sharing after cost recovery; the increase of the royalty from a mere two per cent to a fixed rate of 10 per cent and the imposition of a 10 per cent corporate tax. Additionally, Guyana stands to benefit from as high as US$20 million signature bonuses for the deep-water blocks and US$10 million for the shallow-water blocks based on the model PSA.
The model PSA is being applied to future oil contracts, which will likely be signed once the Government reaches agreements with the companies that were successful at Guyana’s inaugural oil block auction last year.
During the auction, 14 bids in total were received from six companies, for eight of the 14 offshore oil blocks. Exxon was one of the six oil companies that submitted bids for the blocks.
The other companies were SISPRO INC (Guyana); Total Energies EP Guyana BV, Qatar Energy International E&P LLC and Petronas E&P Overseas Ventures SDN BHD (Malaysia); Delcorp Inc Guyana, Watad Energy and Arabian Drillers of Saudi Arabia; Liberty Petroleum Corporation of the US and Ghana-based Cybele Energy Limited; and International Group Investment Inc and Montego Energy SA (London).
Late last month, Vice President Bharrat Jagdeo had disclosed that the Government has cleared the way for the consortium of Total Energies, Qatar Energy, and Petronas to move on to the negotiation phase of the contract award – the only awardees from the 2023 oil blocks’ auction to have gotten this far. (G3)