With US$17.6 billion in crude exports projected for 2025, the Stabroek Block group could recover up to US$13.2 billion in expenses in 2025.
The group—ExxonMobil, Hess, and CNOOC—has committed more than US$54 billion to explore and develop the Stabroek Block resources offshore Guyana. Their production sharing agreement (PSA) with the Guyana government lets them take up to 75% of crude produced annually to recover their costs. The cost recovery process began at the inception of crude oil production in December 2019, with expenses dating back to ExxonMobil’s entry in 1999.
The Guyana government has commissioned audits of expenses from 1999 to 2023. The first audit was for costs incurred in the period 1999-2017, totaling US$1.6 billion. Costs from 2018-2020 totaled US$7.3 billion. Costs incurred in 2021-2023 totaled US$19.6 billion. Altogether, US$28.5 billion was incurred up to 2023. Annual expenses have increased, as the Exxon-led group explores and appraises the resources in the Stabroek Block, and adds developments to their pipeline of projects.
Projects still in development include Yellowtail, Uaru and Whiptail, with total development expenses exceeding US$35 billion. These projects will take production capacity offshore Guyana to more than 1.3 million barrels per day (b/d) by 2028 when they are all expected to be on stream simultaneously.
ExxonMobil also plans to add the Hammerhead and Longtail projects which, when sanctioned, will add to the cost bank.
Guyana expects that when the oil companies substantially recover their expenses, they will not need to take up to 75% of annual crude production for cost recovery, leaving more for the government as ‘profit oil’. Government expects that the transition into that new disposition will be characterized by a significant spike in annual government revenue from oil.
