Dec 09, 2022 News
…as multi-million dollar investments planned for increased production in Guyana, Brazil, other high-return projects
Kaieteur News – ExxonMobil Corporation announced yesterday that its investments next year will be in the range of US$23B to US$25B. The company said more than 70% of its budget will be deployed in strategic developments in the U.S. Permian Basin, Guyana, Brazil, and Liquefied Natural Gas (LNG) projects around the world.
By 2027, Exxon said its investments will allow its production to grow by 500,000 oil-equivalent barrels per day to 4.2 million oil-equivalent barrels per day. It said more than 50% of the total will come from the key growth areas mentioned.
For Guyana, the American oil giant will have at least five major projects—Liza Phase One, Liza Phase Two, Payara, Yellowtail and Uaru—on stream by 2027. These projects will produce at least one million barrels of oil per day. ExxonMobil and its partners in the Stabroek Block will walk away with the lion’s share of this production.
Exxon was also keen to note approximately 90% of its Upstream investments that bring on new oil and flowing gas production are expected to have returns greater than 10% at prices less than or equal to US$35 per barrel, while also reducing Upstream emissions by 40-50% through 2030, compared to 2016 levels. Importantly, all of Exxon’s sanctioned projects in Guyana carry a US$25-US$35 breakeven price range. The company is therefore expected to be gushing with profits over the next five years.
The company also announced the expansion of its US$30 billion share-repurchase programme, which is now up to US$50 billion through 2024. It also recently increased its annual dividend payment for the 40th consecutive year.
By year-end 2022, ExxonMobil said it expects to distribute approximately US$30 billion to shareholders, including US$15 billion in dividends and us$15 billion in share repurchases.
Exxon was keen to note that its Upstream investments programme as well as its expanded share repurchase programme form part of its five-year plan to drive leading business outcomes.
Darren Woods, Chairman and Chief Executive Officer (CEO) commented, “We view our success as an ‘and’ equation, one in which we can produce the energy and products society needs – and – be a leader in reducing greenhouse gas emissions from our own operations and also those from other companies.”
He said too that the company remains on track to deliver a total of approximately US$9 billion in structural cost reductions by year-end 2023 versus 2019.
The CEO also noted that Upstream earnings potential is expected to double by 2027 versus 2019, resulting from investments in high-return, low-cost-of-supply projects.
Exxon and its co-venture partners, Hess Corporation and CNOOC Petroleum Limited currently have four sanctioned developments on the Stabroek Block. The Liza Phase One and Phase Two developments are currently operating at their combined gross production capacity of more than 360,000 barrels of oil per day. The third development at Payara is on track to come online at the end of 2023 utilizing the Prosperity FPSO with a production capacity of approximately 220,000 gross barrels of oil per day.
The fourth development, Yellowtail, is expected to come online in 2025, utilizing the ONE GUYANA FPSO with a production capacity of approximately 250,000 gross barrels of oil per day.
A Plan of Development is expected to be submitted to the Government of Guyana before year end for a fifth development, Uaru, which is expected to come online at the end of 2026 with a gross production capacity of approximately 250,000 barrels of oil per day.
The Stabroek Block is 6.6 million acres. ExxonMobil affiliate Esso Exploration and Production Guyana Limited is operator and holds 45 percent interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30 percent interest and CNOOC Petroleum Guyana Limited holds 25 percent interest.
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