Latest update April 1st, 2025 5:37 PM
Exxon’s decommissioning money could reduce with larger oil reserves – Former EPA boss
Kaieteur News – Former Head of the Environmental Protection Agency (EPA), Dr. Vincent Adams recently said that American oil major, ExxonMobil, could be hiding Guyana’s true oil reserves, as this would reduce the sum that could be deducted by the company for decommissioning activities.
Former EPA Head, Dr. Vincent Adams
Decommissioning refers to the cleanup and restoration of the environment following the end of the life of an oil project. It involves the safe plugging of wells and removal of equipment used during the operations, including the Floating Production Storage and Offloading (FPSO) vessel.
During an Alliance For Change (AFC) press conference on Friday, Dr. Adams shared his view on the recent revelation by Minister of Natural Resources Vickram Bharrat that Guyana’s oil reserves have only grown from 11B barrels to 11.6B barrels over the last two years and eight discoveries.
Dr. Adams, a Petroleum and Environmental Engineer hinted that the company may be deliberately keeping the nation in the dark on its real oil reserves as this would affect the monies it can deduct and hold in its account for decommissioning.
He explained, “If you read the contract and this might be tied to something else because remember the issue that was raised about the money being withdrawn for decommissioning that goes into Exxon’s Bank Account? The amount that is being withdrawn is calculated and here is how that amount is being calculated: it’s being calculated by dividing the (decommissioning) budget…you divide that number by the reserves and then you multiply it by the amount that has been produced.”
Consequently, the former head of the EPA noted, “Right now they are dividing by 11B barrels, if you divide it by let’s say 18B barrels…you are reducing it by almost half as to what they can withdraw for decommissioning so is there a suspicion that is tied to it?” The comments made by Minister Bharrat have attracted criticism from citizens who have been paying attention to the developments in Guyana’s petroleum sector.
It should be noted that the last resource count, dated April 26, 2022, declared the recoverable resource for the Stabroek Block at 11 billion oil-equivalent barrels. Since then, Exxon announced eight subsequent discoveries, the Seabob-1 and Kiru-Kiru-1 wells, Sailfin-1, Yarrow-1, Fangtooth SE, Lancetfish-1, and Lancetfish-2 wells, along with the recently announced Bluefin discovery.
Exxon’s partner, China National Offshore Oil Corporation (CNOOC) Limited, in its 2023 Annual Results disclosed that one of the eight discoveries made by ExxonMobil Guyana since 2022 holds an estimated reserve of 746 million barrels of oil. CNOOC said in the report that the Lancetfish discovery, which was made in April 2023, averaged some 100 million tons, which is equivalent to 746 million barrels, according to the conversion formula of the Independent Petroleum Association of America. ExxonMobil is the operator of the Stabroek with a 45% stake, with partners CNOOC Ltd and Hess holding interests of 25% and 30%, respectively.
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