Exxon’s deepwater developments in Guyana most successful in the world – Routledge

…as company celebrates 5 years since start-up of oil production

Today marks five years since ExxonMobil Guyana started producing oil via the Liza Destiny Floating Production Storage and Offloading (FPSO) vessel, with the company noting that in this time span its deep-water developments in Guyana have become the most successful in the world.
On Wednesday, ExxonMobil Guyana President Alistair Routledge spoke of how much the company’s commitment to Guyana has only grown with the passage of time. According to Routledge, the growth of the partnership is self-evident.
“We’re focused on capacity building, local content development, and environmental stewardship to ensure the benefits of Guyana’s oil-and-gas production reach every corner of the country,” Routledge said.
“We’re grateful for the strong collaboration with our co-venturers, Hess and CNOOC, and with the Government of Guyana – all of whom have played crucial roles in responsibly developing Guyana’s natural resources.”
According to Exxon, its deep-water operations have wound up being one of the most successful in the world, with three complex offshore mega-projects having been launched on schedule in five years. At the same time, plans are being advanced for five additional projects by the end of the decade. According to Routledge, the future is bright for this partnership.
“Working alongside our co-venturers and the Government, we are doing our part to foster a brighter future for all Guyanese. ExxonMobil Guyana proudly celebrates this five-year milestone as a shared achievement, and we look forward to continuing our successful collaboration with the people of Guyana,” Routledge said
The company also touted its strong collaboration with Guyana’s public and private sectors, which has been driving country’s transformative growth. It was pointed out that as many as 1,700 local Guyanese businesses are involved in the supply chain.
“ExxonMobil Guyana is dedicated to enhancing local capacity, and Guyanese businesses and workers play critical roles in its operations. More than 6,000 Guyanese are currently employed in good-paying industry jobs, and ExxonMobil Guyana and its suppliers have invested more than GY $2 trillion to procure goods and services from more than 1,700 local Guyanese businesses,” the company 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 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. (G3)