Exxon and partners profits from 2020 to 2022 three times more than Guyana’s oil revenues

May 28, 2023 News

Kaieteur News – While the Stabroek Block partners’ 2022 profits added up to a hefty $1.23 trillion (US$5.9B) in 2022, if one were to add their earnings in 2020 and 2021, those three years of production returned $1.49 trillion (US$7.2B) in profits to those oil companies. On the other hand, Guyana’s oil money in the first three years of oil production was US$2B. Counting deposits made this year, the figure for Guyana is approximately US$2.4B.

The companies’ financials show that Hess and CNOOC both made profits in 2020 but Exxon made a loss. Their combined profit was $5.6 billion, and Guyana received $41 billion in royalties and profit oil sales. In 2021, Guyana got $85B, but the companies’ profits overtook this at a combined $255B. In 2022, they made $1.23 trillion, and Guyana got $294B.

With the fifth project recently approved, ExxonMobil is well on its way to placing 10 floating production, storage and offloading (FPSO) vessels offshore Guyana. Hence, the exploitation of Guyana’s resources under the lopsided Stabroek Block production sharing agreement (PSA) is set to continue. So far, the deal has allowed the local subsidiaries of the Stabroek Block partners to amass more than US$18B in combined assets.

With calls to renegotiate the contract falling on deaf ears, the Vice President, Dr Bharrat Jagdeo has said that instead of getting a better deal, the government will claw back value using the Local Content Act. However, former advisor to the government on Petroleum, Dr Jan Mangal has said that local content is important and necessary; the Irfaan Ali administration cannot expect it to be a substitute for a fair deal with ExxonMobil.

Mangal has said that local content is a red herring for the government’s refusal to get a better deal. He had explained that while local content makes money for the private sector, it is paltry compared to what Guyana can get with a better deal.

In commenting on the companies’ magnificent profits during his most recent press conference, Jagdeo said the government’s disappointment lies with the lack of ring-fencing in the contract. He said if there was ring-fencing, some earlier investments would have already been amortized, and Guyana could have gotten a bigger share. He also repeated a claim he had made before, that Exxon’s share from profit oil is more than Guyana’s take.

The Stabroek Block is estimated to contain resources of approximately 11 billion oil-equivalent barrels and is operated by ExxonMobil affiliate Esso Exploration and Production Guyana Limited. They hold a 45% interest in the block, Hess Guyana Exploration Ltd. holds 30% interest while CNOOC Petroleum Guyana Limited holds the remaining 25%.

• Counting deposits made this year, Dr. Bharrat Jagdeo, Dr. Irfaan Ali, the figure for Guyana is approximately US$2.4B