Guyana is now receiving as much as 12 million barrels of crude oil per month from the Stabroek Block, according to the Ministry of Natural Resources, as the country takes a larger share of overall production following the recovery of billions of dollars in development costs.
Each lift is typically a million barrels.
The ministry said Guyana’s monthly cargo entitlement has increased from about three million barrels to between 10 million and 12 million barrels, the Ministry said in an August 24 letter. The Stabroek Block’s production capacity currently exceeds 900,000 barrels per day.
The increase comes as Guyana’s share of total production has risen to approximately 39.8%, following the recovery of about US$55 billion in costs by the Stabroek Block partners, the government said.
The ministry explained that the 39.8% figure represents Guyana’s share of all barrels produced and should not be confused with the country’s share of profit oil, which remains 50%.
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Under the 2016 Stabroek Block Production Sharing Agreement, the oil companies are allowed to recover eligible development and operating expenses from production. The ministry said that at the current stage, about 20 barrels out of every 100 produced are being used for cost recovery, leaving roughly 80 barrels as profit oil.
Guyana receives half of that profit oil, giving the country an entitlement equivalent to approximately 39.8 barrels out of every 100 produced.
This is significantly higher than during the earlier years of production, when the maximum 75% cost recovery ceiling was being utilized. With more production being allocated to cost recovery, Guyana’s effective share of total production was about 12.5%.
The ministry said the shift to the higher entitlement occurred sooner than initially expected because strong oil production and prices allowed the companies to recover their costs about two years early.
In addition to its share of profit oil, Guyana receives a 2% royalty on all crude produced and sold from the Stabroek Block.
The government is also now receiving more oil from the Stabroek Block than any individual member of the ExxonMobil-led group. While Guyana receives its 50% share of profit oil as a single party, the companies divide the other half among themselves.
ExxonMobil holds a 45% interest in the block, while Chevron, through Hess, holds 30% and CNOOC holds 25%.
