Guyana’s 50-50 share of profit oil from the Stabroek Block has always been honoured, Director of the Local Content Secretariat Michael Munroe said Tuesday.
This follows news from ExxonMobil that the Stabroek Block co-venturers have recovered billions of dollars in investments made to develop oil and gas resources discovered offshore Guyana.
“Yes, we’ve always honored that commitment,” Munroe said in response to a question.
“…if you understand the agreement, there is a cap for cost recovery, and subsequently profit oil is [split] 50-50, so that has always been the arrangement,” he said.
Munroe was speaking on August 11 at the launch of the Guyana Energy Conference and Supply Chain Expo 2027 in Georgetown.
His comments follow ExxonMobil’s disclosure that it and its Stabroek Block co-venturers had recovered approximately US$55 billion invested in Guyana’s offshore operations, along with a substantial amount of operating costs.
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Munroe said that milestone does not change the 50-50 profit oil arrangement.
“Even in light of the payment of the $55 billion, there’s still that honoring of the specific profit [split],” he said.
Under the Stabroek Block production sharing agreement, ExxonMobil, Hess – now owned by Chevron – and CNOOC can recover eligible exploration, development and operating expenses from oil production.
Up to 75% of production can be allocated as “cost oil” for this purpose. What remains is profit oil, which is divided equally between Guyana and the co-venturers. Guyana also receives a 2% royalty on production.
The 75% cost recovery allocation is a ceiling, not an automatic allocation. If less oil is required to recover outstanding costs, a greater share of the crude can be categorized as profit oil and Guyana consequently receives a larger share of overall production.
Cost recovery, however, has not ended. Producing developments continue to generate operating and other expenses, while ExxonMobil and its co-venturers are spending on additional Stabroek Block work. Those eligible expenses can also be recovered from production.
