ExxonMobil Guyana President Alistair Routledge said the company stands ready to work with the government on the establishment of an independent decommissioning fund for the Stabroek Block operations.
“…we’re very much aware that under the Petroleum Activities Act of 2023, the government would like to establish decommissioning funds…we’ll be happy to work with the government on the establishment of those, what are the rules, ensuring that that all the international best practices are applied to give that surety to people that indeed the funds are available,” he told an Oct. 9 press conference.
According to Routledge, decommissioning costs have been set aside for the Liza 1, Liza 2 and Payara developments. At the end of 2023, that figure was at GY$60 billion.
Routledge explained that decommissioning funds are determined using a unit production system, where the costs are calculated by dividing the estimated decommissioning expenses by the remaining oil to be produced. He highlighted that this process is regularly updated to reflect technological advancements and market conditions.
“Generally, what happens with these funds is that they are set up in an independent way because one of the things we have seen in some countries is that sometimes, the funds are pulled early for other purposes,” he noted.
Decommissioning refers to the process of safely closing down oil or gas production facilities after they have reached the end of their useful life. This includes removing equipment like platforms, wells, and pipelines, restoring the site, and making sure the area is safe for the environment and other activities. Essentially, it’s about cleaning up after oil or gas extraction is complete to minimize long-term environmental impacts.
Exxon is the operator of the Stabroek Block with a 45% interest. Co-venturers Hess holds 30% and CNOOC 25%.
